Here's the reply from the guy I was communicating with at the server:
"The files are stored on the same domain, BUT if you switch them to that path and eliminate lighttpd, pseudostreaming will be lost.
We use this url:
media.yourdomain.com:81
for the lighttpd streaming.
So for example
media.yourdomain.com:81/videos/test.flv
is the same as
www.yourdomain.com/videos/test.flv
"
We'd like to keep pseudostreaming functioning, if possible. Also, he said they're on the same domain. It does seem that there's a cross domain set up, but if the files are actually on the same domain, should it matter?