Commonly there are two steps for you to put a YouTube video in PowerPoint
(1) Download the YouTube video to your computer first
Download and save YouTube video as WMV or AVI format to your local drive using online conversion service or some software converter to do this.
You may download a FREE YouTube downloader to download your favorite video movies, which is also FLV converter that allows you to convert your FLV video to other formats.
http://www.flash-on-tv.com/free-youtube-downloader.html#105
Besides the tool above, here are some other recommended online converting websites. You may choose any one to work for you.
http://vixy.net/
http://www.zamzar.com/url/
http://www.mediaconverter.org/
http://all2convert.com/download-video-youtube.html
(2) Insert the YouTube video to PowerPoint
Go to Insert -> Movie –> "Movie from file" to embed the YouTube video in the slide you want if you have PowerPoint 2007.
If you have PowerPoint 2003, select Insert menu, point to Movies and Sounds, and then click Movie from File.
For more details about how to do it, you can view this article:
http://www.ppt-to-dvd.com/learningcenter/how-to-put-youtube-video-clip-to-your-powerpoint-presentations.html#105