To embed media (such as YouTube videos), WordPress comes with a nifty auto-embed feature that lets you insert media into your posts and pages. Simply take the actual URL, such as http://www.youtube.com/watch?v=3g-yrjh58ms, and place it on it’s own line.
You can control the size of media embedded in this manner in “Settings > Media”. You can also turn off this feature on the same page.
If you don’t want to use the auto-embed feature, or you want more control over a specific video, you can use the embed shortcode. For example, the following:
[embed height="300" width="300"]http://www.youtube.com/watch?v=3g-yrjh58ms[/embed]
For more details see: