Are you running the movies from a CD? If so then can you copy that movie file (mkup.avi) to your hard drive without errors? If not then your disc is scratched. I had this happen once to an unskipable FMV and I couldn't complete Junon. Fortunately, I had backed it all up and knew the "movie trick".
As for advice, get YAMP and use the FMV skipper.