Here is what I do to cleanly embed a Flash video into XHTML page.
<object type="application/x-shockwave-flash" data="dir/to/MyFlashFile.swf" width="250" height="200">
<param name="movie" value="dir/to/MyFlashFile.swf" />
<img src="http://www.blogger.com/images/myflashfiledefaultpic.jpg" alt="The Title" width="250" height="200" />
</object>
This will do the trick and degrades nicely with a static picture if Flash is not available.





Also remember
for the MyFlashFile.swf you should be sure to use just a relative path there or else IE7 (maybe 6 too) will fail to load the file.
so if your flash file is in some directory be sure to do like, "files/flash/MyFlashFile.swf".
Edit: Fix so Flash will show below other elements
Flash seems to force itself onto the top-most layer. If you have other elements you want to show on top of the flash then add this parameter:
<param name="wmode" value="opaque" />