Actually that is correct. When you press the PS button while playing a disk movie it will pull up the solid black screen with the "Do you want to quit playback?" message and it does pause the mp4 video. I kinda wish there was an option for you to switch on & off the pause that happens on the mp4 video. I've gotten so accustomed to the video continuously playing in the background from PS3's earlier days till the pausing seems odd. Even the mp4 video pauses on the PSP as well upon selecting the "Home" button. But by far I'm not sure how this would work for UMD movies on the PSP.