Is it possible to deform video textures to match cloth animations

I was watching UK channel 5 and saw a trailer that featured two cgi birds holding up a cloth sheet that had a video running on it which deformed with the cloth, I thought it was a cool idea and decided to experiment. I set up a simple scene with a cloth enabled flag attached to a pole with an empty generating wind. I tried applying a video texture to my cloth which is an avi of another animation I created with Blender. This works fine when the map input settings are set to Orco or Win, but the video does not deform with the flag and whenever I change the settings to something that should make the video deform with the mesh it disappears and is replaced by a plain gray surface. Is there some way around this or is it a step to far for Blender at the moment?

I think if you mapped the video to the cloth, when the cloth was deformed, so would the video.

Yeah, you need to UV map the animation to the flag, before doing the simulation.