Yes you can have an image display while the file loads. How you do it will depend a little on the image you want. Do you want to display a frame from the movie, so depending on the title selected, a different iamge displays, or would you just like a generic image, like "Welcome to our video Library....blah..blah..(along with a background image).
You could probably try to use CSS to position a <div> in the same space as the player, but the best way would be to display the image in the player itself. In that case you would need access to the Flash .fla and use a movie clip (or even a bitmap) to hold an image in the same space as the video, but one layer below. If my memory serves me correctly, the player will display the first frame of the video as the file buffers, then play the file.
Can you edit the player?