You could do it with a VideoBrush as suggested by BPerreault, but you could also just set Tooltip.Content to a MediaElement.
That is because the Content property of Tooltip inherits from ContentControl and the Content property of a ContentControl can be any type of object, such as a string, a UIElement, or a DateTime. When Content is set to a UIElement (like MediaElement), the UIElement is displayed in the ContentControl. When Content is set to another type of object, a string representation of the object is displayed in the ContentControl. (from documentation)
It should be something like this:
<TextBlock x:Name="myText" Text="MouseOver and you'll get a ToolTip!">
<ToolTipService.ToolTip>
<MediaElement x:Name="myVideo" Source="Butterfly.wmv" Width="300" Height="300" />
</ToolTipService.ToolTip>
</TextBlock >