This question has changed significantly.
I have the latest version of Wordpress and am hosting it on an Apache server. Link to Blog: http://blogs.bzaeds.org/test/2012/05/11/video-test/
Now, here's the thing.
When I upload a video to Wordpress it will play on a Mac in Firefox with the Wordpress URL the item is given (ex: http://blogs.bzaeds.org/test/files/2012/05/720-dunk.mp4" provider="video). In fact, I can go to that link right now on my Firefox browser and have no problems, it plays fine.
However, if I upload a video to Wordpress and use the Wordpress URL (ex: http://blogs.bzaeds.org/test/files/2012/05/720-dunk.mp4" provider="video) it will not play on an iPad or iPhone.
Where this gets fun is -- if I use the APACHE location for the file (ex: http://blogs.bzaeds.org/wp-content/blogs.dir/5/files/2012/05/bunny.mp4) it will play just fine on the Mac AND the iPad & iPhone.
I have been working on this issue for 4 days and I'm exhausted. I've finally narrowed it down to this, but I'm not sure what config setting would be causing an issue like this. Any help would be greatly appreciated!
Edit: It is looking like it's the fact that Wordpress can't do byte handling and join this with Multi-site and different directories and you get chaos. I realize this is the issue, but I'm not sure what I'd do to workaround this issue and installing mod_xsendfile didn't seem to work nor editing the jwplayer code (which I'll try again, perhaps I did it wrong.)