Embedding Video with a Thumbnail or still Image

I am trying to start a video blog, in which I can showcase some of my work to others. I have found several ways to embed video in wordpress, yet, ideally, It would be nice to have something similar to what youtube provides, and have a preview thumb or still preview image placard, the kinda previews what the video is about.

THen, when someone hit’s play, it simply plays the embedded flash video, and keeps you on the same page. I host all my videos on my own wbesite and domain name. Has anyone done this before? And could anyone explain to me HOW to do it.

Im somewhat proficient in HTML and php encoding.

Thanks!

Ty.