Ok, so Fire Fox 3.5 came out yesterday and it now fully supports embedded video objects via the HTML 5 video tag.
Excitedly, I went to test the functionality of this new feature. However, when testing again this URL: http://www.mozilla.com/en-US/firefox/video/ I found that the browser began to load the video but it appeared to just hang. Now, I am using this browser on a network that sends all http traffic through a proxy server which runs Squid, HAVP and SquidGuard.
After further investigation I determined that there was a default setting in the HAVP configuration file (/usr/local/etc/havp/havp.config) that was causing this issue.
Look for this section in the config file:
# Allowing Range is a security risk, because partial
# HTTP requests may not be properly scanned.
# Whitelisted sites are allowed to use Range in any case.
# RANGE false
Change RANGE to:
Remember to restart your HAVP processes.
Now, the browser will be able to play videos since it needs to request files via ranges.
Let me know if this helped you out.