Thanks Michael.
Here's how they embed their code:
http://flowplayer.org/plugins/javascript/embed.html
That page basically shows an example of a plugin you can use with the player, but the example is the actual code to a working flv video.
If I had the ability to host both the player and the video file that would be huge. Flowplayer is ftp and go, and free.
I also think Flowplayer has ability to overlay html, text etc on their player. These custom feature you'll lose hosting files elsewhere.
Being all files could be hosted on our own servers we could certainly bypass any security - as I'm sure you already know.
Some files I'd rather not have on YouTube. I like exclusive.