Blogs in Wordpress can be created either in a subdomain of wordpress or with your own domain name. So there can be 2 scenarios.
For the ones that are created under wordpress (subdomain of wordpress) embedding youtube videos can be done by including the final youtube video URL in the following format. It is activated by default for a wordpress blog
Usage
[ youtube=final link]
or check out
http://faq.wordpress.com/2006/07/29/how-do-i-post-a-youtube-video/
So the approach works on http://www.wordpress.com, but it wont work on your own site which uses the wordpress platform. I did a lot of research going through the list of popular wordpress plugins and finally managed to get a YouTube video embedded into one of my posts.
So there is a solution for that also. You need to install the Smart Youtube wordpress plugin and activate it.
http://wordpress.org/extend/plugins/smart-youtube/installation/
Once you are done with the activation proceed as said in the smart youtube installation FAQ (http://wordpress.org/extend/plugins/smart-youtube/installation/)












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