I'm pretty sure YouTube is also progressive or at least partially, maybe the newest stuff is all streaming. Are you anticipating a high volume of users? This would be the only reason to use streaming. Also I would reccomend sticking with Flash, it's the most compatible option.
Progressive costs you bandwidth in that if someone wants to see the middle of the video they have to load everything prior. With progressive you only know when someone accessed the file so you can't tweak video content to match the user interest and it's harder to add in pre-roll or post-roll.
With a streaming server off a CDN you only pay for what the user watches. Also with a streaming server the video can be queued to any point and will respond instantly. With a real streaming server you can get data on how much of your video was watched, when, by who, and what parts. The drawback? Streaming is expensive- plan to spend $1000/mo to maintain this server plus your bandwidth overages.
If you want real streaming make sure to use a real CDN- Vitalstream is good. I had complications/downtime with Limelight. Akamai is very expensive unless you have heavy heavy traffic like MSN or NBC.
For small websites or startups, progressive is perfectly acceptable.