I was just playing with the iPhone SDK which can simulate the iPad and guess what I discovered. If you embed h.264 videos on your website using iWeb you already have perfectly functioning embedded videos....they play on the page and can expand to full view and they look great!
My whole site is h.264 embeds so I wanted to see if I could at least get anything to play and EVERYTHING plays wonderfully!
Yay! This really made me happy....now I can show clients work without having to put anything on the SSD.