Appreciate your help Jeremy...but I only have bleak news.
I tried all of the below...to no avail.
1. Pasted the above video URL in a separate line
2. Installed 'Enable oEmbed Discovery' plugin
3. Added the code
if ( ! isset( $content_width ) ) $content_width = 600; in functions.php file
4. Unchecked 'Crop thumbnail to exact dimensions' at Settings > Media Settings in my blog admin
5. Increased Medium size to 600x600 at Settings > Media Settings
But none of the above could ensure proper display ofvideo in IE.
I've also observed the following:
1. Every time I open or refresh a page in IE 8/9, the video displays properly, and then shrinks to a size 0f 300x150 as the full page is uploaded. This perhaps means that when the browser comes across a specific code as the page is loaded, the video shrinks to 300x150 size.
2. Just FYI, as I mentioned before, the same problem occurs with a few other plugins like for example, Usernoise modal feedback.