It's been awhile since I tried it, but mplayer should already play from /dev/video0. Does this not work for you?
mplayer -vo xv /dev/video0
(I might not quite understand what you're trying to do though...)
Don't know what else to tell you about applying a patch; Markku's recommendation is spot on. The value for -p is the most important thing to worry about, and the -p value you use depends upon how your diff file was created. Sometimes you can navigate to the directory of the file to be patched and execute:
patch -p1 < /path/to/patchfile
But this assumes your patchfile was created in such a way that the use of -p1 is appropriate. Sorry, but the manpage is your best bet. Focus on the -p explanation and look at the first few lines of your .diff file to see which -p num you need to use.