Adding Video to your Entries
To add video to your site, it is highly recommended that you use one of the online video hosting services and then embed that video in your own entry.
YouTube uses an embedded Flash player, which means they host the video, pay for the bandwidth and serve up the file which will appear "embedded" in your website. If you want to embed someone else's video in your entry, go to the YouTube page you want, and then look to the right of the video, and you'll see a box that is labeled Embed. In the Embed box is code that you can copy and paste into your blog post.
If you want to embed your own video in your entry, you'll need to create an account at YouTube or another video hosting service, upload your video, and then use the Embed code as detailed above.
blip.tv and some other sites have similar code for you. You can only embed video/animation if the hosting service provides that kind of embed code.