I am looking for a method to embed videos in web pages without using a plugin like Flash or Silverlight. Ideally, I would be able to <embed src="movie.ext"> and expect this to work in most browsers.
I'm aiming to encode videos to a format that works across IE7 and later, Chrome and Firefox. But I need to know which codec is the most portable.
Unfortunately needing to support IE7 rules out HTML5 video support.
H.264 and WebM is what you need.
H.264 is supported in Safari and IE (these also refuse to include WebM support), WebM is supported by alternative browsers Chrome (of course), Firefox and Opera.
I recommend using video tag first, then as a fallback option you can include a Flash player, which will play either version (H.264 support is already included, WebM support will be soon).
If you want to include 3rd party code, there is a comparison of "player" components here.