While searching for difference between HTML4 and HTML5 I came across the point that :
HTML5 brings a whole new dimension to web world. It can embed video
The idea regarding the tag is that the browsers should have native support for it, without the use of any additional software. The standard is not yet ready, and one of the points not agreed upon is regarding what codecs to support. For more information you could have a look at the html5 video wiki page which includes a list of which browsers support what formats.
If you are planning on implementing the html5 video tag, you should provide backwards compatibility. One way is to use the VideoJS library, which will fall back to flash, if the browser doesn't support the video source.