The new release of Skype 3.5 allows you to watch web videos and share them with other Skype contacts without leaving the Skype Chat window - you can search videos online and embed them in the same area of the Skype chat window where you type the text messages.
Here's how the new Video Embedding feature of Skype works [limited to DailyMotion and MetaCafe, no YouTube or Google Video support yet]
First you have click the "new" Video button in the Skype Text Chat window (just next to the Emoticons link) :
This opens a video search Skype window where you can either browse video by tags/ratings or search using keywords. Then click the "Insert in Chat" button to embed that video in your Skype chat session.
That's it. Here's how the embedded video clip look like in the Skype window. Your Skype friend can click the green Play icon to begin playing - he or she can chat with you simultaneously in the same window. Pretty interesting.
Related: How to Record Skype Calls
Internally, Skype add the following embed code to your text message that contains the video:
<media type="video" partner="dailymotion" title="Content" uri="http://skype.dailymotion.com/swf/5hZv9j" more_info="http://www.dailymotion.com/video/34533" thumb="httpfe://multimedia.dailymotion/.."> </media>
Maybe this code could give some clues on how to embed YouTube video in your Skype chat sessions.
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