First you must add it to your INSTALLED_APPS:
INSTALLED_APPS = (
....
'oembed',
)
Then in your template, include the oembed tags:
{% load oembed_tags %}
Then, surround something with the oembed tag. It will search for oembed-able links and replace them with the proper embed:
{% oembed %}
There is this great video at http://www.viddler.com/explore/SYSTM/videos/49/
{% endoembed %}
Will result in:
There is this great video at <object classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" width="320" height="222" id="viddlerplayer-e5cb3aac"><param name="movie" value="http://www.viddler.com/player/e5cb3aac/" /><param name="allowScriptAccess" value="always" /><param name="allowFullScreen" value="true" /><embed src="http://www.viddler.com/player/e5cb3aac/" width="320" height="222" type="application/x-shockwave-flash" allowScriptAccess="always" allowFullScreen="true" name="viddlerplayer-e5cb3aac" ></embed></object>
There is an optional width and height parameter, that can be invoked thusly:
{% oembed 320x240 %}...{% endoembed %}