update 2 ; )
It has its own video player to address this syncing issue.
For most web video streaming this is a fine alternative, find a video using google chrome (or any browser) copy and paste its url into Airfoil's video player and your sorted, plays all web video sources Ive tried so far.
For local video files this player isn't up-to-date with codecs, so no divx avis, no mkvs etc. Im hoping these will come with future software updates.
So its a 4 step process to play video from a browsed site (copy url, switch application, paste, play) through your Airport Express, which is ok for now because theres no alternative. Google give us an alternative, enable AirTunes protocol support please.