Maximum error correction and each QR Code "pixel" is 6x6, while each video pixel is 1x1. And, there is enough intentional "pixelation" to ensure enough codewords read correctly. (Repeated for each frame.)

http://en.wikipedia.org/wiki/File:QR_Ver3_Codeword_Ordering....

The encoded text is just a bitcoin address, if anyone was wondering. bitcoin:154R1264X1EVGP1L4HNAHU87DD5NANQR9H

Is the pixelation of the video a requirement for a successful scan? Would it be possible to embed a higher-quality video within a QR code, or does it have to be pixelated like it is in that one?

Not sure if there's a trick in this particular code, but in general it doesn't matter what the resolution of irrelevant pixels is.