This is exactly what we did. The video frames were converted to tilesets and stored in the rom image. For playback, the memory mapper (MMC3) is used to swap between the frames without having to rely on too much CPU. Luckily Guy figured out the MMC3, otherwise we'd have only had enough space for a few frames.
Correct as well about the colors. It would have been nice to better utilize them, but we didn't have enough time to do that properly.
