This will probably add to your confusion, but what the heck...
In the 90's EMBED was the Netscape way of doing it, OBJECT was Microsoft's. Netscape wanted to use EMBED chiefly for Java applets. Microsoft wanted to use OBJECT for any object with a registered MIME type, including Java applets, ActiveX (COM) objects and much more.
The W3C decided to adopt a modified version of Microsoft's OBJECT, much to the chagrin of Netscape. Netscape reluctantly started to support OBJECT, but with a strange, er..., bug. If you tried to use OBJECT for ActiveX objects, Netscape crashed! It didn't ignore OBJECT. It actually crashed the browser. And people say Microsoft is evil!
Early releases of IE were also screwed. IE3 crashed if you tried to use OBJECT for anything else BUT an ActiveX control. IE6 crashes EVERYTHING (well, almost...)
Now, I hear that EMBED has been resurrected as part of HTML5.