WordPress 2.9 testing is going on and WordPress team is still making some changes to its new features. We had earlier reported that Video embedding thru URL feature has been included in WordPress 2.9 and it is still three but team has done some changes in WordPress 2.9 beta 2. In WordPress 2.9 beta 1, the insert video option above the content editor on edit 
panel for post was behaving in such a manner that if you provide URL of YouTube video then that will embed the video in your post rather than inserting just a link (as in current version of wordpress i.e. 2.8.6). But in 2.9 beta 2, WordPress has removed that feature and put the same logic as 2.8.6 where that option will include only a link to the video.
But don’t worry, WordPress 2.9 is going to having the easy embed option for YouTube or other videos with the help of oEmbed project. You can embed a YouTube video in a post content in WordPress 2.9 by adding a piece of code similar to the below mentioned one. Just replace the URL with the URL of your required video,
Piece of Code to Easily Embed YouTube Video in Posts
href='http://www.youtube.com/watch?v=yk9SKl3ct-M
href='http://www.youtube.com/watch?v=e01dW8vXR18
Create a Video Gallery easily in WordPress 2.9
You can copy the URL of a YouTube video from the address bar of that particular video. Now change the the Embed options i.e. Width and height of embedded videos from the Media options under Settings tab on Dashboard. We have already explained this new option in previous post.