Embed tags arenít w3c compliant but unlike the object element, which loads the swf and all its component pieces, embed loads the swf only, the components are loaded on demand. This translates into a big difference in load time.
Is it possible to construct the object element so it functions in the same manner as the embed tag?
FYI: I currently use swfobject to make my flash content accessible and keep my site w3c compliant but it has one drawback - it doesnít lazy load.
If <embed> is the best solution for your application I'd use it and ignore the validator. <embed> is standardised in HTML5 [webmasterworld.com]. IMHO it's not worth spending time on finding an alternative solution to one that already works fine, solely because it doesn't (currently) validate.