The <video> tag *specifically was* conceived to render video without
proprietary plugins.  Aside from being bad from their license alone,
proprietary video playback plugins are also technologically inferior,
and video rendering exemplifies that.  Even Free video playback
plugins are inferior to native rendering for performance reasons.

With <video> the browser itself will render video, like it does pngs,
and text.  Another great advantage is the video playback is exposed
via the DOM, and can be CSS-ified, and interacted with dynamically
using javascript.

Aye.  And the last I heard they were still discussing what codecs to employ and what standards they should use.  So I would guess that if browsers do support it they are attempting to beat the curve ;) 

Here is a video of some of the magic this makes possible:
http://www.bluishcoder.co.nz/video_svg_demo.ogg

You can download Firefox 3.1, Alpha 1 from:
http://download.mozilla.org/?product=shiretoko-alpha1&os=linux&lang=en-US

And demo video playback in your browser by visiting this url in it:
http://people.xiph.org/~maikmerten/demos/arctic_giant.html

For some reason, that demo site appeared to work properly on my
machine which is not yet using FF3.1 (Mozilla/5.0 (X11; U; Linux
x86_64; en-US; rv:1.9.0.1) Gecko/2008071615 Fedora/3.0.1-1.fc9
Firefox/3.0.1)

The actual tag that corresponds to the video is:
<video src="arctic_giant.ogg" width="512" height="385" controls="true"></video>

So I guess it is also already supported in FireFox.

Awesome!  I didn't know FF supported it yet.  Are you sure that FF isn't launching a 3rd party app, like Luke suggested?  If it truly is being rendered by the browser and not a proprietary plugin (even if it IS MPlayer :-P) then that's awesome.