Are there any more lines to the error message other than what you posted? If
ffmpeg is actually running but hitting an error itself, there should be some error explaining that that also gets printed alongside what you've got here.
ffmpeg is installed and works when invoked with that name on the command line, the most likely issue is that there's a version mismatch between the two: ImageMagick is producing a command with a syntax that doesn't work with the version of ffmpeg you've got. You can run
convert -version and
ffmpeg -version to see what versions of each you have.
As for using GD, it's simply not going to work with videos at all. GD has the benefit of being bundled with PHP and therefore highly available, but the price is that it has a far more restrictive set of file types it can work with than ImageMagick does.
Imagick is just using ImageMagick under the hood, so it also depends on ffmpeg to do anything video-related.
Doing thumbnailing with ffmpeg directly, or at least more directly, is possible, but there's nothing in Omeka to do it for you, and it's probably not worth the trouble vs. getting ImageMagick to work.