how to display video previews

This is a job for the client-side. You have to get hand-on Javascript.

but some people can bypass the js and thus watch the whole video for free, as long as it's client-side code.

create preview versions automatically for each video and show them.. if the user is logged in - show full versions

Well it depends. Two ways...

1. You cut it outside and upload as a mini version (Advantage: You have control as to what to show. Disadvantage: Extra storage space required)

2. You use a video plugin package (search for one I'm sure it exists) to cut the video at run time (Advantage: Reduced storage. Disadvantage: Extra processing time at the expense of memory)