EMI have started to block embedding of YouTube music videos.

Why? Because YouTube is paying them for each stream served up. So, the records exec's reptilian brains think: force all views back to YouTube and make instant money!
The controversy has crystallized around the band OK Go, whose clever "treadmill" music video had 49,807,727 (!) views at the time of writing.
You can see why the record companies would be keen to get their hands on YouTube's reported payment of between .004 and .008 per stream. I'll do the maths for you - that's between $200k and $400k for the OK Go video alone, not counting possible advertising premiums for delivering 50million eyeballs to YouTube/Google.
But since EMI stopped embedding, views of the video have dropped 90% from 10,000 per day to 1,000 per day. According to OK Go's Damian Kulash the band's last royalty cheque, for six months of streams was a “whopping $27.77 ...”

A couple of big questions jump out of all this.

The first is simply technical- why can't YouTube track royalty streams from embedded videos? No answer at the time of writing, but we're looking into it....
The other more interesting one is why the record companies were willing to trade off the band's (and their fan's) efforts to promote themselves for the promise of a quick buck? Isn't the whole MySpace phenomenon built on self-promotion and viral marketing to friends, fans and followers?
Wouldn't a better solution be to allow embeds, but monetise by requiring the track to contain top and/or tail advertising, plus a token that could be redeemed for a discounted online track purchase?

What this means to you

This is the promise of micropayments finally being delivered on. Put this together with YouTube's forays into long-from content and it's a very exciting.

But, it comes at the expense of some larger entity taking (distributor/aggregator) away the content creator's right to promote and monetise their own content, it could be a poisoned chalice.