On my old N1 there used to be an option to play video from one source while the audio would be playing from a different source (i think it was called dual zone video?).

Now I've been trying to figure out how to do the same thing on the Z1 for quite some time but haven't been successful so far. Does anybody know if it's possible? For example if I want to play the video on the screen from a DVD while the music is playing from a library/ipod file.

you need an extra monitor to do that. Then there is an option somewhere where you can change the mode from mirror(which is probably what its at right now) and rear video and so on.

thats not what im looking for i want to play video in the front and sound from ipod

other than using rca cables and hook up different sources, I do not think there is an explict option for doing what you are talking about.