If you can enter  HTML, then you should be able to use an iframe, or an embed
tag, or anything else you can think of.

The YouTube page gives you the code. It looks like this:

<object width="425" height="344"><param name="movie"
value="http://www.youtube.com/v/8P9QlojtrWs&hl=en&fs=1" target="_blank" rel="nofollow">http://www.youtube.com/v/8P9QlojtrWs&hl=en&fs=1"></param><param
name="allowFullScreen" value="true"></param><embed
src="http://www.youtube.com/v/8P9QlojtrWs&hl=en&fs=1" target="_blank" rel="nofollow">http://www.youtube.com/v/8P9QlojtrWs&hl=en&fs=1"
type="application/x-shockwave-flash" allowfullscreen="true"
width="425" height="344"></embed></object>

When I add that to the Source Editor on the edit page of the blog
post, it just eats it and converts the whole thing to:

<DIV class=ExternalClass99B8906E0816478CA6ACCBBE05A7AE94></DIV>

Which shows up as nothing.

Sorry, but yes that is what happens. The rich text  editor working in
a blog  filters out objects. It only allows basic things like
hyperlinks and images.

It would be interesting to try creating  the post  with an object  in a
tool which can upload the post through the API (like Word 2007) and
see if that works.