I have just updated the plugin to add wmode=transparent to all YouTube embeds, as I can’t think of a single case where this would not be the desired behavior.
As you could probably see when you were looking at the code, it isn’t quite as simple as just passing a specific paramater to the embed code, as the embed code is 100% generated by YouTube. The only thing the plugin does is tell WordPress to ask YouTube for the iframe code instead of the Flash code.
Now, when YouTube returns the iframe embed code, I have added a filter that tells WordPress to add wmode=transparent before it does anything else with the code (like cache it or display it).
The updated version is now available to download.
If you find this works for you, please consider rating my plugin, as I take a lot of pride in my work.
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