Lexino: No
it takes the place before the prologue, you can see that they are in Foltest's camp and Geralt is wearing the first armor you wear in the game.
Err... But his excellency the ambassador wants to converse with master Geralt after the storm of battle subsided. And the Leather jacked doesn't mean anything as you can see it in videos from later stages of game too. Maybe something they forgot? Or maybe it is, just like you say, it takes place before the prologue. But after fully watching the video after playing the game i noticed that the ambassador is talking about Demavend as he is alive but in fact he is not, killed 3 months before the assault on the La Valette castle, which means he died about 2 months before the attempt on Foltest's life so the video is probably from a very early version as we learn about demavend's fate in one of the earliest videos. Must be another plot hole like the fourth witcher in Letho's group in one of the flashbacks or the "unlucky assassin". Apparently the game has many of them but even with this many plot holes the game is awesome, don't ever saw another game being a great game with this many plot holes.
