We are using MediaElement.js in an embeddable Media Player at The Open University. I've been doing most of the development, and have found it very easy to extend the framework via Javascript "feature" plugins.
I particularly like that it (mostly) works with Ender/jeesh (http://ender.no.de/#jeesh), as a lightweight alternative to jQuery.
And, its lightweight..
See it in use, http://cloudworks.ac.uk/cloud/view/5630
Well done John Dyer and the community!