I think I found it! It is not the connection time-out that interrupts the movie, but rather it is the time out of my Game Pad (Controller).
Both of the machines where I have FFXI installed are set up with a Logitech F710 Game Pad. This is a wireless game pad with a receiver that is plugged in to a USB port on the PC. If I do not do anything with the game pad for a period of time, it will turn off to save the battery. Apparently, the receiver does pass through some kind of signal to the game when the game pad turns off. And the game has been set up in such a way that if it gets ANYTHING from the game pad receiver (even though it may not be a button press or a move of the joystick or d-pad), it will interrupt the movie and go on to the box to accept the "Rules of Conduct".
I do wish the game would look at what it received, and if it's not a button push, ignore it. (and it would be ok to react to any button, not just a cancel button).
If I either disconnect the receiver from the USB port, or take the batteries out of the game pad before the movie starts, the movie does play all the way thru (as long as i don't do anything else to interrupt it). It is better to take the batteries out, since disconnecting the USB port will result in not being able to use the game pad even if I do plug it back in. It won't work until I exit the Playonline Viewer and start it up again.
My other complaints about the connection time-out and the aspect ratio of the movie still stand.

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