My users have the same problem — except all of them have the “Disable Visual Editor” box checked. Even with the Code/HTML editor, *ALL* video embed code is stripped out when the post is published.
This is a new problem. I recently upgraded from WP 2.3 to 2.7, and that’s when the problems started.
All of my users are “Authors.” The interesting thing is that with my Admin account, embedding video still works fine.
Any ideas? This is driving me crazy, because my site worked just fine before the upgrade. I guess if it ain’t broke, don’t fix it.