I have written a few articles on how to get online videos (like YouTube) into PowerPoint presentations (links below).
PowerPoint 2007 (with internet)
PowerPoint 2007 (without internet)
I have previously recommended using www.mediaconverter.org for video conversion. While I didn't have any trouble with that service, it was limited in that you could only do five conversions for free. The service was also very basic. For example, I am often asked if only specific parts of YouTube videos can be downloaded, and I never had an easy answer.
I have since been introduced to another free media converter (http://www.clipconverter.cc/) which I full-heartedly recommend.
ClipConverter conversions are free. And there is the added benefit of adjustable settings that you typically don't see with free video converters. Not only can you convert a wide variety of online video content to MP3, AAC, WMA, M4A, OGG, MP4, 3GP, AVI, MPG, WMV and FLV, but you can also adjust the audio volume and bitrate as well as the video aspect ratio. The best part: you can specify what part of the video you want the conversion to start and end with–so if you just want 15 seconds of the clip right in the middle, no problem.
About the author: AJ George is IconLogic's lead Technical Writer and author of both "PowerPoint 2007: The Essentials" and "PowerPoint 2008 for the Macintosh: The Essentials."