Slow plying of movies depends on the type of compression that is used on such a movie file. Celeron's don't have problems showing a normal DVD. At least the laptop I bought for my ex didn't, it also could play Xvid compressed movies without any hiccup (on a 1Gbyte Vista machine).
The latest drivers for your video and/or audio cards together with the correct codecs will work wonders, even on a low end Celeron. I used to watch compressed movies on a Celeron 500Mhz back in the day.
You should not use a Celeron to create compressed movies, that will take forever. Most AA-class game titles will not run smoothly, even if you spend a lot on getting extra RAM. It is better to buy a 'fully equipped' processor instead of the Celeron, but for general use they are not so bad as Ath portrays them to be. Especially the newer versions aren't too bad.
My first encounter with the Celeron processor was the 300MHz one...and that was a really bad processor. We were setting up a helpdesk with 32 Compaq Celeron systems...but man, those processors were giving unreliable results when they work and had a habit of breaking for no apparent reason. At least 80% of all systems were replaced within a year...with Celeron 333MHz machines. And those were the complete opposite, reliable in any way. Intel learned their lesson with that one.
As always, your mileage may vary.