For enjoyable non-hardware based mpeg decoding on a miggy you need
1) A fast, DMA driven drive. PIO will suck the CPU dry even before you start decoding anything.
2) As fast a CPU as you can get with the largest bandwidth memory access you can manage. Nothing less than a good 060 (CS MK3 or CSPPC with 64-bit bus access is about as good as classic 680x0/PPC will get) will have sufficient power. A lot of number crunching is involved.
3) The fastest possible graphics bus you can get. Basic 640x480x16bpp video at 25fps requires 14.7 MB/s.
I've studied the results of quite a few classic amigas and TBH, the only cards I have seen that can sustain this kind of continious copy speed (or beter) from fast RAM to VRAM are the BVisionPPC/CVisionPPC and some PCI cards running on GRexx. The majority of mediator and prometheus systems seem to max out at about 8-10MB/s for this kind of operation.
Of course a lower resolution helps; 320x240x32bpp at 25fps (which needs 7MB/s copy speed) is achievable by pretty much all existing cards.
Some cards, notably those that support overlays and such can accelerate some aspects of video playback. Overlays can typically use YUV data directly and perform scaling which saves the CPU a lot of work.