He played the video montage to a tune called "African Flower in the White House".
Earlier this year, anti-Gadhafi fighters ransacking his compound in Tripoli found an album of photos of the former top Bush administration official.
"Quite extraordinary, weird and a bit creepy, " Rice told CNN's Piers Morgan on Wednesday night about the scrapbook.
Rice said when Gadhafi showed her the video montage years ago in Libya, she tried to keep the conversation on business.
"My job was to go there and do diplomatic business and get out, so that's what I did," she said.
"But I have to say I did have that terrible moment when he said that he had the video.
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