First and most dangerous xss (?) is that flash can read your DOM... Don't embed videos on pages where user can input his/hers login data. Login forms should be separated.
Usually flash embeds uses code that looks similar to:
Youtube:
<object width="425" height="350">
<param name="movie" value="http://www.youtube.com/v/AyPzM5WK8ys" />
<param name="wmode" value="transparent" />
<embed src="http://www.youtube.com/v/AyPzM5WK8ys"
type="application/x-shockwave-flash"
wmode="transparent" width="425" height="350" />
</object>
Vimeo:
<object width="400" height="225">
<param name="allowfullscreen" value="true" />
<param name="allowscriptaccess" value="always" />
<param name="movie" value="http://vimeo.com/moogaloop.swf?clip_id=10239065&amp;server=vimeo.com&amp;show_title=1&amp;show_byline=1&amp;show_portrait=0&amp;color=&amp;fullscreen=1" />
<embed src="http://vimeo.com/moogaloop.swf?clip_id=10239065&amp;server=vimeo.com&amp;show_title=1&amp;show_byline=1&amp;show_portrait=0&amp;color=&amp;fullscreen=1" type="application/x-shockwave-flash" allowfullscreen="true" allowscriptaccess="always" width="400" height="225"></embed>
</object>
<p><a href="http://vimeo.com/10239065">La Fete (HD - 2010)</a> from <a href="http://vimeo.com/animalcolm">Malcolm Sutherland</a> on <a href="http://vimeo.com">Vimeo</a>.</p>
Metacafe:
<embed src="http://www.metacafe.com/fplayer/4317045/bmx_face_slide.swf" width="400" height="345" wmode="transparent" pluginspage="http://www.macromedia.com/go/getflashplayer" type="application/x-shockwave-flash" allowFullScreen="true" allowScriptAccess="always" name="Metacafe_4317045"> </embed>
<br><font size = 1><a href="http://www.metacafe.com/watch/4317045/bmx_face_slide/">BMX Face Slide</a> - <a href="http://www.metacafe.com/">Free videos are just a click away</a></font>
Best solution for enabling embeded content is to strip tags with exception for embed, param, object and list of attributes from the the samples that can be used.
Remember, some attributes can run javascript code as well as anchor's href...
Edit:
Allowing only trusted sites in src and param's value attribute is kinda good way to prevent hAx0rs from doing bad things but it's not flawles. Another big thing: read more about allowScriptAccess. Its a Param's attribute you should remove or set to sameDomain / never. It will prevent SWF from running javascript :)