Did the system automatically make this file? I'm confused about the YV12 line, which according to the man pages is only avalible for the SiS driver and not the driver you're using.
Bad news. According to an article for FreeBSD (which uses the same window system as Linux), the error you described means that "XVideo is probably not supported by your card". Also, on a closer look at the man page, the driver can support it but not all cards that can use the driver can. The man page for the driver can be found here: http://www.xfree86.org/current/s3virge.4.html
Under the description it says which cards do support XVideo. If you don't have one of the cards mentioned, it sounds like your stuck as far as XVideo goes.