I just put flowplayer on my server.
http://flowplayer.sourceforge.net/
And then you can just put the object code in your posts or pages as you see fit. You have to convert the media to .flv locally tho.
vPIP sounds like a good option, I tried it, but I wasn't crazy about the big additional box it places below your editor. I'm also a little adverse to using things that are in beta. I might might try it again in the future. I'm kind of a minimalist so the flowplayer option suits me.
flowplayer also has some cool features - you can use your own skins, you can have playlists, and you can use a splash image (like a nice thumb) that shows before you play the movie.
The directions on the flowplayer page are fairly good. I didn't have any problems. If anyone needs help setting this up, let me know, I'll be glad to help.
*note: somewhere on the flowplayer page or maybe a linking site recommends some free windows application for converting media to .flv it doesn't work. I'm converting media with Blaze Media Pro (which is like $50, they have a free trial). There is a GPL command line unix program that I will probably write a script for to batch process sponsor clips on a local linux box. That is next on my list.