I have a dream, a dream that there is a way to get a animated wallpaper like the ps3 system background on my ubuntu 8.04. I want the same smooth floathing background. Any ideas how?

http://www.youtube.com/watch?v=ejqLDKZQP5c
that thing that floats in the back

http://www4.get-e.org/Backgrounds/Animated/ You will need to use E17 (which is alpha but stableish) though. and no has made the exact PS3 like stuff... (yet) but its possible.

You could also try something like this.

Indeed, I played a bit with xwinwrap before all the beryl/compiz stuff (xcompmgr or something like that, IIRC), and it allowed to use any video file (or program, but I didn't try that) as background and even blend it with any bitmap wallpaper.