I have always found a link to be the best option. Your lowband users will be thankful if you do not embed video on the page, very grateful if this video is on the page with other content like images or text.
In the end I think direct downloads will save you bandwidth. Take this for example, a user loads the video via his browser and when done watching it he leaves the page. 4 days later his friend comes over and they want to watch it, catch is his browser cache no longer holds the video, so he has to request it from your server again.
The browsers cache dumps itself all the time, so you can't really know how long data will stay in it. By just sending them to the direct download they will have the entire file on their hard-drive, and are less likely to delete it as soon as the browsers cache clears.
Also embeding the video into your webpage means its displayed in the browser, I don't know about you but I find that very anoying, I would much rather watch video in my prefered program and codecs.
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