sundaridevi - 11:21 am on Mar 7, 2011 (gmt 0)

Am I missing something here?

You get traffic and SEO benefits by embedding a video hosted on another site too. A real advantage of YouTube is that you can get some additional search traffic from youtube itself and from google's indexing of that video.

I'm not sure that the search engine cares where the video is hosted as far as your page SERPs are concerned. In this case you should look at it the same way as if you display an image on your page that is stored on another server.

The added problem is that if you have a lot of traffic to your page, and must deliver many simultaneous streams, your users may not have a good experience playing back streaming video unless you have a video server installed on your webserver.