After hearing rumors of the ability to create video ads within the Google AdWords API Sandbox, and then hearing that the launch of that feature would be delayed, it is now officially here.
Jeff Posnick, AdWords API Team said at a Google Groups thread that this feature is finally here:
After a few false starts it does now look like video ad creation in the Sandbox environment is enabled for all users. I tested it today and my request that previously failed now goes through.Apologies for the length of time it took to get this resolved.
Forum discussion at Google Groups.