Ok, let's see if we can sort this out once and for all.
Embedding a video does work, it's just that the YouTube link needs to be of a certain format. For example, the YouTube link you posted, Laura is a shortened youtube URL. As you can see, your link begins with: "http://youtu.be" but the link needs to be like this: "http://www.youtube.com/watch?v=XXXXXX"
I think nonch pointed out an easy way of posting the right YouTube link. When you're watching the video on YouTube, click on 'Share'
which can be found underneath the video:
You should then see the URL appear in a box underneath the video. Click on 'Options'
underneath the URL box:
Then check the box for 'Long link'
Then copy and paste the URL in that box
Now you can copy and paste the URL between the tags to embed the video in your post:
Let me know if this works for you now.