There are so many out of date tutorials for doing this, I felt I had to try and get something useful up the Google rankings. Without further ado here goes...
- Upload your video into Google docs, and wait until it is listed in the file list
- Double click the video file. It will appear in a lightbox format and begin playing. Stop it playing (an optional step, but the sound annoyed me!).
- Click on the menu icon, and Open in New Window
- A new window will open and play the video. Now click the menu icon again. This time "Embed item" is visible
- This gives you the IFRAME embed HTML code
Not sure why Google have made that so difficult - it never used to be...! Perhaps it respects security settings or something...?