The new version fo my Flash Click-to-View XBL works with <embed> Flash in addition to <object> Flash.
Previous versions didn't block <embed> because they used <xbl:content>, which doesn't work with replaced plugin elements (bug 190970). Previous versions didn't really work with <object> either; instead, they took advantage of the fact that Mozilla ignores most <object>s and looks at the <embed>s they contain instead. The new version uses JavaScript in the <xbl:constructor> to replace the Flash with the placeholder.
The extensions that use modified versions of my XBL, Ted Mielczarek's Flash Click-to-View and Theodore Drake's Flashblock, haven't been updated to use the new code yet. These extensions make it easier to install the XBL, but they must be reinstalled each time you get a new build.