Snooping is enabled but we have deliberately disabled the proxy feature as it wasnt working for us in our environment.
You might want to test again... I've been told that Nortel/Avaya is now recommending that IGMP Snooping and Proxy be enabled for any networks that have any medium to large Multicast applications.
In the mean time, i'm thinking of throwing a Cisco router on the VLAN segment and let the router do the querying and multicast functions in lieu of the core stack. This may also have benefits later on if we need to send or recieve further multicast streams from outside of the domain (WAN).
You could certainly do that... might not hurt if you want PIM functionality as that's not yet supported in an IST (ERS5500/5600) stack configuration. That would allow you to have multicast sources and destinations in different VLANs.
Question though. If i have a router hanging off one core stack, should i configure VRRP anyway as insurance against packets not being able to traverse the IST to another edge switch?
If I understand the question VRRP isn't going to help. If your router supported mutli-port trunking (LACP) you could create a LACP trunk using two ports (one to each core switch), that would prevent any packets destined for the router from needing to traverse the IST and it would also provide you redundancy should one of your core switches fail.
Having packets/frames traverse the IST isn't necessarily a bad thing. You can't dual-home ever device to both core switches so occasionally there might be a device or two that is only connected to a single core switch and occasionally the MAC/FDB table will end up with the frame landing on the 'other' core switch, not a big problem the frame/packet will be switched/bridged to the proper switch and the user never notices anything.
Good Luck!