You can now insert YouTube video clips inside Google Documents much the same way as you embed videos in web pages or Google Sites.
Just open a presentation document inside Google Docs and choose the Video option under the Insert menu. You can either paste the URL of an existing YouTube video or you can search YouTube videos inside Google Docs itself and insert any video from the search result by picking the video thumbnail and choosing the Select button.
Once a video is embedded in the presentation, you can publish the presentation to the web (as a standard web page) and your video will appear inline.
Alternatively, if someone chooses to download your presentations as a PDF file, the main thumbnail of the YouTube video will appear in the slide instead of the video and the thumbnail image will link to the actual YouTube video.
Google has rolled out support for YouTube only in presentations, the feature is not in Google Spreadsheets or Google Docs yet.
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