Try using a non-beta version of X. 4.2.99.anything is a prerelease, and may not work well. I use XFree86 4.2.0 personally, but 4.2.1 should work as well.
It could also be the fact that you have a TNT card. I know they don't support everything that XVideo has to offer (XV_BRIGHTNESS for one). However, I do remember someone getting it to at least work (sans XV_BRIGHTNESS) on some sort of TNT card, so I don't think that's it...
Is there anything in your log file (/var/log/XFree86.0.log) about XVideo being disabled for some reason? Are you loading "extmod" in your Modules section? (SubSection "extmod" ... EndSubSection works too, if you have that rather than Load "extmod". FYI.)
Maybe dropping back to 3123 would help a little?
Which distro and version is this, BTW?