The handling of media in Drupal 7 is really a huge improvement from the earlier versions. After reading Drupal 7 Media Module is Must-have I started playing around with it.
Install, enable and enjoy
After doing that you are pretty much ready to use the media module, which has very nice wysiwyg integration. Alle you need to do is enable the media button at:
And then you need to enable "Converts Media tags to Markup" under:
That is all there is to it. I will now disable the Image button and only show the Media-button.
Media can be extended by more modules, e.g. Media: Youtube. I am just testing out the implemenation below. All you need is the Youtube-link for the video, and it will be implemented nicely automatically. For your pleasure I chose a really beautiful song: