Is there a way to embed YT vid into Gmail so the receiver can play it within the email?

Not yet

Someone should make a greasemonkey script for this if this was possible.

I think they should embed videos into Gmail in general. For example, when someone sends you a video file, you'll be able to download it PLUS watch it within the email itself. Just like MP3 files.

...And pics. Also word processor and spreadsheet files can be opened in HTML or in GDocs and Presentations can be opened as a flash file, so why not YT video's

The difference is that all those things are sent as attachments rather than links. I guess they don't want to interfere with the actual body content of emails. And I think that's how it should be.

Also, just imagine the spam possibilities if they automatically embedded YouTube videos...

...videos with sound. With this kind of spam you will look stupid at work while reading your mails =)

Maybe, a screenshot and link (Watch video) to open embedded player like in Google SERP

yeah, could someone write a greasemonkey, I can't do javascript :(

Emails can include HTML or text, and HTML can embed videos, but I guess Google disables advanced HTML in Gmail using their whitelist, probably to protect from malicious scripts. But one option would be to not support embedding itself, but to turn plain links for iFilm/ YouTube/ MetaCafe etc. into little thumbnailed "watch here" links, similar to what they do in Google results.
It's not what we traditionally think of what email should do but perhaps it's like next-generation emailing. I mean they do it in chat as well, and I think it's kinda neat, even though not traditionally what we expect from chat, right?

It's just that I've set up a mailing service to friends in Japan called Daily Dose, which usually includes lots of vids. If there was a GM script they could install it and watch them in the email so as not opening new tabs or windows, its just messy

Tony
I was about video files, not links.
Files are much more realistic to embed than links