Matt Mullenweg et al just released a (beta) WordPress embedded video player for WordPress.com users with the paid space upgrade. It utilizes VidaVee and looks relatively better than most embedded flash players out there. All you have to do is upload a video to your WordPress.com account and WordPress.com will convert it to the appropriate file type for you. At the moment, videos are limited to 70MB.
WordPress Video
May 26, 2007
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