In WordPress to embed video, you have to TURN OFF the “rich text” post editor in order for the embed Flash code to work.
To do this, in your WP admin section go to your “Users” page and under “Your Profile” way at the bottom it will say “Use the visual rich editor when writing.” Just uncheck the box next to this text, then hit the “Update Profile” button.
Now when you go back to your post editing screen you will be able to input the embed video code and it will show up.
Then, when you want to go back to the “rich text” editing box, just go back to the “Users” page and re-check the box.
Hope that makes sense. Kind of a pain, but it happens with all the embed players.