I'm guessing their "cart" is really a Raspberry Pi like device that is using the NES only for video out and controller in. There is no way in hell a 1.79Mhz 6502 can play streaming video. It's a fun party trick though.
I was wondering if maybe they preconverted the videos into a sequence of tilemaps and a set of approximate tiles. I notice they are only using the same 5 colors, which is under-utilizing the capabilites of the nes which should be able to display a 13 colors at the same time. (Each individual tile uses one palette of 4 colors, and there can be max of 4 palette used at a time, but one background color is shared by all…
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.