I would love to hear more about this too. I would like to find a site that can host simple 15 second low budget videos that when uploaded become lightweight and loop. The concept is to trade them out for pictures on the posts.
even i never use wordpress.I only use blogger.com for my blogs.But it's interesting news.
Try this one: http://wordpress.org/extend/plugins/pb-embedflash/ - I hope this will do for you, I find it great.