There's only one problem with your video. You tweaked it so that it plays nicely on the Nutcracker tab so it probably won't be sync'ed when you go out to real hardware. I suggest you use the Preview tab because that is more realistic timing wise. The Nutcracker tab is trying to do a lot more than just playback the XSEQ file. It's actually populating button info down in the effect windows so it doesn't always keep up. Open your sequence in Preview and check it out again.
And since I didn't want the average NC user to get left out here's a quick video of how to do this in under 2 minutes. I grabbed a Frosty the Snowman video off of Youtube and extracted the MP3 file from it to use for audio. The ffmpeg tool used to extract the frames is already installed when you install xLights. Watch how when I first play it in the Nutcracker tab the video is not aligned with the audio. Then I stopped playback and moved over to the Preview tab and loaded the file and now it's all good. http://youtu.be/j9IAfYdYzwU
Someone asked for a couple details about getting the video images. Here's the steps I used. I'm not sure if these websites put anything bad on your PC though because it doesn't seem like you ever get anything for free.
I go out to YouTube and copy the URL for the video I want.
ffmpeg.exe is installed in the same directory as your xLights.exe so if you add that directory to your path you can run the ffmpeg command from the cmd prompt. Not sure whether its available on the Mac.
For this video I ran the following command: The 20 is your desired frames per second and 85x64 is my matrix size. I actually used this technique to try different matrix sizes. I originally was going to build a 34x32 but when I rendered this video I couldn't tell what was playing.