Try using a helper:
<param name="url" value="@Url.Content("~/Video/1.wmv")" />
<embed src="@Url.Content("~/Video/1.wmv")"
This will ensure that a correct url to the video file is generated. In this example I suppose that you have a Video
sub-directory and the file is inside this directory.
As far as the 500 error is concerned, I suppose it is not related to the code snippet you have shown. Try looking at the server's EventLog where unhandled exceptions are traced.