They did not explicitly state that links and embeddings will be preserved, but I hope that they will do a good job on this.
According to an e-mail sent to Google Video users, all Google Video hosted content is to be removed after May 13.
This has been confirmed on http://video.google.com/support/bin/answer.py?answer=1233300&hl=en
UPDATE, Apr. 24, 2011 : Google has confirmed that they will auto-migrate content to YouTube. THIS PETITION IS NOW OBSOLETE.
we understand that you want to shift the focus of Google Video, but are sad about the large amount of great content that will become unavailable as the result, and even if users move their content, dead links will result.
Please preserve the hosted content, even if users do not actively move it to YouTube. We trust that you can find a good solution that works for everyone (you're Google, after all), be it moving all videos to YouTube automatically, creating a separate archive site, or preserving the archives in some other way. It would be nice if links and embeddings continued to work, or if they at least would somehow point the user to the new location.
Keeping content available on the internet is hard, and we think that many users chose Google Video because they thought that Google is the safest choice to keep the videos available for decades, that you will always make sure that content is preserved. Please do.