Yesterday YouTube introduced an experimental version of an HTML5-supported player. HTML5 is the new web standard that adds many new features to your web browser, notably support for video and audio playback within the browser itself. Now Vimeo has launched its own HTML5 experiment.
This means that users with an HTML5 compatible browser (right now: Safari or Chrome), and support for the proper audio and video codecs can watch a video without needing to download a browser plugin. However, the HTML5 player only works on Vimeo.com right now, embed code (as above) remains Flash.