Er nope doesn’t work.  Think I have to tweak it.  But you can just add the tags “[youtube]youtube link here. [/youtube]”  directly in the live writer editor and it will work.  As shown above.

Overall I really like live writer.  You can get more info about it here.  And some tutorial videos found here.

Melissa and Bingying you guys should use this.  It’s free too!