Yes, they are upgrading us. The Captcha thing is to curb spammers. It's new, give it some time. We'll work the bugs out as we go.
As for the Youtube thing, an instructional post is in the news and announcements board, but basically, you don't put the whole URL in, you just put in the video code between the YOUTUBE tags. I fixed the OP, so just click the "quote" button to see the change to the code.
Make sense?
ETA: The thread with instructions on embedding:
http://www.chazhound.com/forums/showthread.php?t=243813