Firstly, embedding any video into a PDF file means you have to use Flash Player, which isn't an option on iOS. PDFs cannot contain HTML, period. Secondly, YouTube insists that developers only access the video stream using their own native APIs; you cannot use the multimedia tools in Acrobat or inDesign; there has to be a custom-built Flash/Flex app handling the stream negotiation. Again, that means Flash Player and usually a chunk of scripting, neither of which are going to happen on iOS. It would work in the desktop version of Adobe Reader, but that's it.
For mobile consumption only thing you can do is include a URL linking people to YouTube's website.
Thanks for your help Dave.
Do you know if something like this would be possible if I used Digital Publising Suite?
Would that then make it an app and allow for the video to work?
Suggestion: embed a screenshot of the video and link it to Youtube, so the embedded player of iOS can play it. It won't play in the PDF, of course, but at least it will play.
Yes, you can stream a video from Youtube using DPS. For more on that pop
over to the DPS forum. It's been discussed quite a bit there.
Can DPS produce a PDF with it embedded? Or would it have to be an app?
The only way to embed a video is to download it and include it with the app.
And DPS produces apps, not PDFs.