I am running IE8 beta 2 on WinXP Pro SP3 with the latest Flash player 9 and SpywareBlaster and Spybot SD immunizations. I have had the same problem with IE6 and IE7. Firefox and other browsers are not affected.
Youtube videos, flash cartoons and other flash content display correctly but when videos are embedded on another site like a blog all I get is an image placeholder with a PNG or GIF file icon or a red X in the top left corner. Other content such as the ads on Fark and Ars Technica do not load but most other ads do load. I have tried undoing the immunizations in SpywareBlaster and Spybot to see if it was the cause but the content still does not load. I am not running any adblocking software.
I run Firefox 3 and Minefield 3.1 as my main browser and all content and advertisements display correctly in them with SpywareBlaster and Spybot immunizations applied.