The "adult" movie Kevin watches in Home Alone. Apparently the main dude who was supposed to be in those didn't show up so they just had some janitor or tech fill in and he went full ham on that shit and made it something to remember.
There's also the McBane movie in The Simpsons that shows up in multiple episodes and if you connected them all together they actually make a coherent story line (it's just riffing off Lethal Weapon anyway).
I'm surprised no one has mentioned the fake old movie that plays in Home Alone. "I'm gonna give you till the count of 10 to get your ugly yeller no good keester off my property before I pump your guts full of lead! One... Two... Ten!" 🔫🔫🔫🔫🔫
"S." by Doug Dorst is in itself a fake novel, where the "real" story takes place as handwritten notes in the margins to form the complete story, the fake novel itself just a prop. But reading the novel-within-a-novel-that-is-the-novel "Ship of Thesus" by itself is an interesting short surreal read.
Seven on 7 is a series of TV news shorts and commercials from The Boys universe. It's a delightful little parody of Fox News. The whole series is available free on YouTube.
The poems of Thomas Zane in the old gods of asgard concert in the book about max Payne in the video game Allen wake in the video game control in the amazing TV series the threshold kids in that song the janitor is singing.
This is not exactly what you're asking for (media inside media), but it's really close in spirit (nested narratives), and I really like it: a book written in Portuguese in the XIX century, called Noite na Taverna (Night in the Tavern).
The book has an overarching story of friends telling each other stories in a tavern, over booze; with all those nested stories being about love, despair, and death (it has a strong gothic vibe).
And, as each character tells the others a story, there's always that fishy smell that the story might be actually bullshit; and other characters do raise some doubts about its in-universe veracity (like Bertram does to Solfieri). And you, as the reader, do the same - but in no moment you question the veracity of the overarching story, and you feel like you're inside the tavern alongside the drunkards.
So it's a lot like the author is toying with your suspension of disbelief - redirecting it from the overarching story to the nested stories, and as you doubt the later you get even more immersed into the former.
If I must use an example of media within media, then my choice would be "The Book" within Orwell's 1984. I think that it's a great piece because it shows Orwell's views on politics and society, while still serving narrative and worldbuilding purpose - for Winston it's a material proof of the Inner Party's bullshit, for O'Brien it's a tool of the Inner Party to sniff out dissidence. (Note: 1984 is extremely misrepresented nowadays, I'm aware, but I still like it.)
Most modern adaptations present the stories Odysseus tells while visiting the Phaeacians as if they were the actual plot—but Homer’s audience would have known Odysseus as a notorious liar and trickster and wouldn’t necessarily have regarded his stories as true even within the context of the frame narrative. And Homer’s epic focuses as much on the parallel stories of Telemachus and Penelope—I read the underlying story as their struggle to untangle Odysseus from his own web of deceptions and fantasies and bring him back to reality.
Good Morning Glipglorp! From the Androids and Aliens podcast by the Glass Cannon Network. It was a random bit of world-building that the players latched on to and ran with and it turned into a whole episode.
King's Misery when there are several bits from the novel the writer is making to please his capturer seems like a classic at this point. More classic is the trope of Necronomicon-alikes in lovecraftian stories. But I prefer The Book of Mindfulness that a character from the Black Book sitcom accidentially swallowed and became a saint, even god-like figure.
Sweet Bro and Hella Jeff from Homestuck. Although it actually predates Homestuck and was retroactively converted into media-within-media, does that still count?
Watched Asteroid City recently for the first time. I thought the play within the movie (and the intertwining back and forth of storylines) was really interesting and entertaining.
Inside the 90s anime Martian Successor Nadesico, there is a 70s-era anime called Gekiganger III. Characters various levels of knowledgeable about, or fans of, the show. A single OVA episode was released in addition to the clips from within Nadesico.
Station Eleven from… Station Eleven is probably there only one that’s been as interesting to me as the story itself, I guess because it’s such a big part of the story and character motivations. The book and show are both good in their own ways, but I particularly like the passage repeated throughout the show:
I remember damage, then escape
Then adrift in a stranger’s galaxy for a long time
This may not fit perfectly into the that category but i think it's cool how Lazarus Jones exists in the media in some capacity in most of the GTA games. One of the best threads of continuity throughout the series.