From version 1.1 onwards the plugin supports web browsers with no Javascript support or with Javascript disabled. If a web browser does not support Javascript or Javascript is disabled, Youtube’s new embed code (iframe) will not work. If that is the case the plugin will try to show the video using Adobe’s Flash (old embed code).

Test it right now: Disable Javascript in your browser and reload this page, if you have Flash installed you should be able to watch the video.

Read this post for an update.