Last week we came across a tweet where a user of Windows Live Writer was crashing when trying to install a YouTube video. Through a few back and forth tweets we realized he had Adobe Flash installed only for the Chrome web browser. Adobe has a different install for Internet Explorer than it does for Chrome. Installing Flash for IE fixed the problem. Ideally you should not need Flash at all but of course you will just see a placeholder of the YouTube video without it but in this case Live Writer needed it to be installed. We think this will only happen on 64-bit Windows 7. This also does not look to be a problem in our Wave 4 Beta.
We have seen other crashes with YouTube and Live Writer when Flash was really out of date or has had its install corrupt. If you have issues with YouTube and Live Writer check your install of Flash for IE it might save you some time working through the issue in the support forum.