Is it ethical to watch recreational videos or listen to music on a portable work computer bought from a research fund?

Unless explicitly stated in the rules that they should have told you when you got the computer, you can do whatever you want that doesn't damage the machine or compromises your work. Common sense applies:

• Playing a CPU intensive game at the same time you are crunching some numbers you need soon will slow your computations, so it isn't good. Playing the same game while the CPU is doing nothing else, should be OK.
• Storing music or films in the hard drive is fine, but if you are running out of space for your data, they should go away.
• If the university is providing some backup service, make sure you are not bloating it with gigabytes of your personal stuff. A few megabytes of configuration files of your own programs and other small things shouldn't be an issue.

One can argue that just by using it you are wearing off the battery, and that is costing your university money; but on the other hand, a new battery costs around one salary day, and if that is what it takes to keep you happier and more productive (even a tiny bit) for years, I think it is well worth it.

If you were to need the help of IT support (in my university is as good as nonexistent anyway), they may delete your personal files and programs if they think they are related to the problem, as Todd Wilcox pointed out in the comment. If they were less understanding, you may even be told off for installing software that they don't know (mind you, it may even be research related!).

This started its life as a comment, but I think it actually makes a good answer:

I think discussions such as "listening to music help me concentrate better" are overanalyzing things here. To seriously justify anything with this effect, you'd have to dive into the psychology of different styles of music, working times, etc.

Seen more superficially, listening to music and watching movies are activities that are simply not directly a part of your work. The - implicit or explicit - agreement for using the laptop will likely be somewhere between "Use it like you would use your own computer, but eventually return it undamaged." and "Each and every keypress must be directly a part of your work, or else you must not perform it." You just have to find out where in this spectrum the agreement for using the laptop lies.

Therefore:

• Look at what other (more senior) colleagues do with their work laptops.
• Ask them directly.
  • Try to find out about intentional or implicit deviations between official rules and actual behaviour (and possibly decide for yourself then what you can live with).
• Possibly ask the supervisor, if the above points are inconclusive.

My answer might be slightly different than some... I'm in charge of managing several computers for an elementary school, including teacher computers, and man... the workload teachers and students cause for me by doing things they totally thought were "innocent" is huge. Don't get me wrong, if it didn't happen I wouldn't have a job, so I don't mind much, but sometimes they wreck relatively well working machines fast.

The main issues come from going to unknown sites and getting viruses. If you're using legit sites to find your videos and music, I'd say it isn't a big ethical issue. Legit meaning stuff like watching videos on Youtube or Netflix, listening to your own music on iTunes, etc. If you're using shady sites that might potentially bring on viruses, it becomes an ethical issue. If you're in the grey zone in the middle somewhere... the ethics are in the grey zone too.

So really I think the ethics depend on not just the actions but how you are partaking in them and what risks you are bringing along with you.