The responsive embed block can be used in columns or in any other area. It will always fill the width of the area (or column) and scale the height to keep the aspect ratio fixed. This is useful for things like videos.
As an example, take the video at http://vimeo.com/2982834 . From the sharing button, you get the "embed code" <iframe src="//player.vimeo.com/video/2982834" width="500" height="281" frameborder="0" webkitallowfullscreen mozallowfullscreen allowfullscreen></iframe>. When you add a responsive embed block to your page, you'll have to specify //player.vimeo.com/video/2982834 as the IFrame source URL. The aspect ratio can be set to either 16:9 or 500:281 (this is basically the same if you check the maths). The chrome height should be 0 -- this is only needed for certain sites, which have a non-resizing bar at the top or bottom.
If you want to make an existing YouTube block responsive in the same way, after installing this addon, you only need to set its custom template to Responsive. The aspect ratio will be determined based on the width and height that you gave the block.