Yes, it seems to convert all videos to .flv using a ffmpeg command line which you can specify.  It converts almsot any video format for me successfully to .flv.  But it also has "offserver" capability where it can handle most embedds from Youtube as well.  You need an API key for this, I believe.

I think it uses exec() to handle the ffmpeg video conversion.  So you have to enable exec() likely in your php.ini file or such.  It depends on your hosting what the exact solution will be so if it's shared hosting, a VPS, or a managed dedicated box you should probably just ask your host.

Cool thanks for the info

What is the exact error you're seeing?

Im getting the generic error:

An unrecoverable error has occurred and has been logged. Contact the site administrator with the following information: 

Exception #1361900902.

Finally a log has turned up (why do errors not instantly appear in log files? Thats a question for godaddy! I use hours cos of that) with a useful error saying there is a problem connecting to database. It's saying the hostname is wrong. I'll keep plugging away, i've probably got someting small wrong.