The cheating in this context would be to study the thing the file represents rather than the representation.
A dumb example would be to make a 10 hour movie from a single image that doesn't move. There is no reason for the file to be larger than the original jpg.
> I can not only get Orson Welles' Citizen Kane. I can get Citizen Kane in colour!
https://www.youtube.com/watch?v=JI5qy9Zoh_0
To argue that this was not the method Sloot used is missing the point. The question is: How to do it, not how to imitate someone else.
In his demo Sloot was playing 16 full movies simultaneously on a 1995 laptop at any speed. A high end computer had 32 MB memory, 133 MHz cpu, PCI video cards had 4 MB ram, 66 MHz, 560 MB HDD
If it was not what he said it was why didn't he just sell what he had? Without the extraordinary claims the demo already requires cartoon physics. He drives the truck into the match box, making an U turn inside doesn't at all seem necessary???