Google is testing new HTML5 embed code that plays the videos using either flash or HTML 5 player and it uses <iframe> tag. It is still under construction but developers want feed back form current users so the beta version of it is now available.
It won’t play the video on HTML 5, if the video has got Google ads or if you haven’t set it up yet. If you are on a mobile device, it won’t play if it won’t take you to a separate player or if it won’t play the video in-line. But if your not eligible to view the video in HTML 5 it will play the video using the flash player. But again it depend on the preferences and where you are viewing the video.
To use this service you have to join the YouTube HTML 5 beta version and you must be using a browser which supports HTML5.
Firefox that support the WebM format
Apple Safari 4.0 or late