The above approach works but is clearly not the best way to do things. What if the original video is updated - then you will have to revisit the whole encoding-decoding cycle again. Secondly, there will be considerable loss in video quality when it is converted from one format to another and Youtube is definitely not the best place to see high resolution video clips. They will degrade it to 320x240 size clip.
So here's a very easy way for embedding flash videos in your website without loosing any quality. Also you won't have to download the video to your own server - you can embed the flash video player in your site and it will stream the video [or play directly] from the source website [you might want to obtain permission from the content host since you will be consuming his bandwidth]
To do this, just copy-paste the following HTML snippet in your blog template and replace the height, width and streamName parameters with real values [you can find the video size (dimensions) and URL of the flash video by looking at the HTML source code of the webpage where the video is originally embedded]
Incase you would like the video to start only when the site visitor hits the play button, replace autoPlay=true with autoPlay=false. Once the video track finishes playing, the cue marker would return to the original position. You can disable this by setting autorewind=false.
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