see http://www.longtailvideo.com/support/forum/Bug-Reports/14493/Scrub-bar-is-in-accurate for background.
I'm migrating a system from RealPlayer that relies on precise (sub-second) start times in playlists.
While a video stream can only be played back starting at keyframes, it seems arbitrary start times could be be implemented behind the scenes by doing the following:
- accept a requested start time.
- start reading the video stream at the first keyframe preceeding the requested time (it appears this is how it works today) but do not display it.
- wait until the playhead reaches the requested start time.
- start rendering video to the screen.
If a file has very few keyframes this would cause a delay between seeking and playback, so perhaps it would be an optional feature enabled by preciseseek=true?

Flash will do this by default.
If you use a serverside means to seek to an arbitrary point in a video file, the player will start loading the video file, but will not start displaying the video until it hits a keyframe and can begin to re-assemble video frames based upon the keyframe+change data.
I have a sort-of-demo using ffmpeg to supply the video, if you would like to see how this works. Since the requests for video data have to supplied from the server, instead from local cache, there may be a slight delay before the video starts in addition to the delay before Flash hits the keyframe. Audio playback starts immediately.