When you add video to this type of function the complexity and cost go way up. Flash animation might be a compromise.
Here is another possibility:
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I wanted to know how I can display song lyrics at church from our laptop and through our projector. Currently we are just using Powerpoint slideshow (with only background and lyrics) on a laptop hooked up directly to our projector. I would like to have a setup like a character generator for the lyrics over my choice of still backgrounds, video or perhaps live video someday. Are there inexpensive options to accomplish this?
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Go get the FREE Visual Basic Express from Microsoft. Now write about ten lines of code (less really) and you have your teleprompter.
The simplest approach is something like Photoshop that can composite whatever text or images you wish.
Stepping up a bit, After Effects can feed progressive text on top of a video or still photo background.