The embed element is deprecated in XHTML 1.0. Only Netscape needed it (R.I.P.).
This element will invalidate your markup. But then so will a lot of other WP output.
YouTube video links are troublesome, but once you get it figured it’s easy to knock up a template where you can just paste-in the URL. If your site always shows videos at the same size, write a simple PHP function that accepts the ID of the video as a parameter (in the snippet below, thats ‘uOzrZMhf7Ig’).