Why not "...sul video."?
"Sul" would mean "on THE video", i.e. a specific video. If you're just saying it was in video format (as opposed to seeing it in the cinema, for example), you would not use "sul" (su+il) but "su".
Why is "Guardavo un film su video" incorrect?
"Ho guardato" just worked for me.
No idea. Reported 17/Jun/2015
Probably because the english sentence would usually imply that you have finished watching the film.
It could also refer to a habit, but it definitely needs more context.
vedevo un film su video?