I went to the Apple Store and the tech guy said:
1) the iPad thinks things played from iPod are music files so it will only play the movie files in the playlist as audio files when in shuffle mode. If you select a single file to play, it will play as a movie.
2) only videos purchased on iTunes store are classified as Music Videos. Videos downloaded from Youtube are classified as movies.
3) set auto-lock to "never" when playing files from iPod playlists.
Not exactly what I wanted but I'll adjust.
What you have to do is:
1. Put the Video on the films sectoin of ITunes
2. Then right click on the video and click on "Get Info"
3. Click on the options tab of the dialog box
4. Then on the drop down menu title "Media Kind", select "Music Video"
5. Deselect the tick box below that says "Skip when shuffling"
6. Click OK
The video wil now be in the music section, and also listed as a musci video on the video dection of your ipod. You can create a playlist titled "Musci Videos" and then put the music videos in that.
Hope this helps...
To listen to music videos, whilst the idevice is locked...
Also, go on the music video via the ipod music section, and then pause it. Then, click the home button to get to the home screen. After this, double click the home button to get the small multitasking bar up at the bottom. Keep swiping right, so that you get to the furthest left. There should be a music play 'menu'. Click play, and then you can listen to the music shilst the ipad is sleeping. When you unlock it, the lock screen will show the beginning of the video as artwork.