Watching videos in a terminal is not exactly a useful thing since everything can only be displayed in colored ASCII code - meaning, you will have quite a low resolution. However it is still a funny thing you should have done once if you're already on a Linux system.
All you basically need is a video and the newest version of mplayer - I'll use mplayer2 here since I had some issues with the official repository version. To download mplayer2, add the appropriate repository, refresh your sources and install afterwards:
sudo add-apt-repository ppa:ripps818/coreavc
sudo apt-get update
sudo apt-get install mplayer
If the last command does not work for you, replace mplayer with mplayer2 and try again. Afterwards, enter
mplayer -vo caca /home/christian/soi.mp4
to play the video (replace the video path i used with yours). To cancel the video, simply press q.