Saving mm_youtube urls to cck

I changed it so it returns http://www.youtube.com/watch?v=$the_youtube_id as I think you need the full url to work with )

Yes, this is correct. A step function needs to return TRUE or a $filepath for success or FALSE.

$node->{$field['field_name']}[0] = $item;
should that be...
$node->{$field['field_name']}[] = $item;
in case doing a multiple file to multiple emfield?

Yes, this code should have matched the image/fielfield code above it. Fix is committed

Also, I think Media Mover saves a reference to the file (when you click edit on the node which has the emvield, it has in the Media Mover linked files section a reference to the 'file' youtube.com url)?

Any Media Mover action that saves or selects a file to/from a node will save the NID. Those files will be attached to $node->media_mover. This is important for uniqueness checking (don't select the same file twice) file handling outside of CCK etc.

Not sure if this is correct as its not really a 'file' but i guess you could have a reference to it as long as not trying to Delete it later which it will error since file doesn't exist.

Without getting overly technical, yes it should be considered a file. Note that D7 has gone to URI's for all files and there are modules which are implementing stream wrappers which allow you to reference files by things like youtube://filename

Media Mover can handle deletion of material, unfortunately that functionality has not been implemented for any of the mm_node functions. See: http://drupal.org/node/566870 for the incomplete documentation. More stuff for the todo list.

I found the mm_node module wasn't attaching the file to the node for emfields. I've attached a patch but I've only tested it with the zzz_custom_url provider.

Thanks for the patch. Committed and ready for testing.