The jAlbum "film" icon applies only to videos added to a project. It doesn't recognize images that link to externally-hosted videos on YouTube or Vimeo as representing videos, and therefore can't apply the "film" icon to them. This skin option, on the other hand, recognizes both types of video objects in an album.
jAlbum is a bit stubborn about remaking thumbnails. If you have an existing project in which jAlbum applied its own "film" icon to the thumbnails, but want to switch to the Pluto video overlay, the quickest fix is to choose Make All rather than Make Album. If you have just a few videos, and don't want all of the regular images to be reprocessed, open the output directory (Tools, Open Directories, Output directory) and delete the JPG files for the videos in the slides and thumbs subdirectories. Then, Make Album will create new thumbnails and poster images without the jAlbum "film" icon. Similarly, if you decide you want to go back to the jAlbum icon, turn off the Pluto option for video overlays, go to Album » Settings » Images » Advanced and check the box labeled Superimpose film icon onto movie thumbnails, then either choose Make All, or selectively delete the video images from the slides and thumbs subdirectories from the output and Make Album again.
The text that is displayed, which defaults to NEW, is set under Text. Its size and style can be adjusted under Fonts » Index Page. When a visitor hovers on the "New" icon, the popup tooltip shows the date on which the image was added or taken. The tooltip prefix, which defaults to Added: or Taken:, depending upon the "newness" criterion chosen, is set under Text » "New" Overlay. The date format is taken from the jAlbum setting under Album » Settings » Advanced » General.