Tropic Thunder is a nested film: there's a movie within a movie within a movie.
There's a good analysis of the many layers of reality being presented here: the film, the film within the film, the mockumentary, and then, closest to reality, the 'viral' above.
[It's also a wonderful comment on 'viral' films and creating them for a stereotypically disaffected teenager.]
The play within the play device has been around as long as drama, the story within the story for as long as stories.
In literary terms, the mis en abyme is a device that allows for the interplay between different levels of narrative, and projects outwards to comment about the audience, who by definition are spectators of a narrative, as the characters within are watching the play inside the play.
You know, like in Hamlet: the play's the thing wherein I'll catch the conscience of the king and that. There's something about the relationship between audience and narrative that's being examined, the way each can affect the other.
Anyway, it seems that increasingly this sort of layering is being used to blur the lines between the fiction and the real world, to intertwine elements of reality into the narrative and vice verse. However it's done with a nod and a wink to the viewer, who is traversing different narrative levels and knows that Ben Stiller isn't really playing Ben Stiller in the video above. Somehow the trappings of reality are satisfying - they flesh out the narrative world of the movie.
We know they aren't real, but we like it when they go to greater lengths to pretend that that are - it rewards our suspended disbelief.