That video is very cool, I think it is actually running in the Skyrim game!
On an "IMAX size" flat screen you will only have very limited movement, because you don't want to zoom in too much, but even a small amount of movement is very important, normally when you watch a movie on a HMD (with no tracking) you must keep your head very still, if you move your head then the screen will move with your eyes and it makes you feel sick. This is because your balance sense tells your brain you are moving but your eyes have no motion reference, its a common problem and another good reason we need to get pan & scan working.
SVP colour bars give you a good reason to move your head, to see why they happened! But when you hit the side of the screen it will just stop, but maybe we can add a special effect to this, like the iPhone menu bounce! Another idea is to warp the screen outward so it "wraps around" your vision, like a projector cave, the head-tracking then pans your view around this curved screen, but on most normal movies you will miss important things, and your neck will get very tired!
I don't actually think we need to recalculate the light bars in real time, I think it will be ok to always calculate them from the outside edge of the base video, the difference is so small you will not notice it. This is true for the top and bottom bars anyway, which have to be very large because of the aspect-ratio of the Rift screen (4:5). I think to create the side bars we could just apply a "frosted glass" effect to the base video because it will fill the whole horizontal axis anyway, but we can still use SVP for the sides if it looks better to match the other bars.
ps - Do you have an experience with the Direct3D video renderers? I have only ever seen them used in media players to stop tearing problems.