Para parsear BBCode es mejor usar expresiones regulares:
Código PHP:
<?php
preg_replace("/\['youtube'\](.*)\[\/'youtube'\]/i", "<object width=\"425\" height=\"344\">\n<param name=\"movie\" value=\"$1\">\n</param><param name=\"allowFullScreen\" value=\"true\">\n</param><param name=\"allowscriptaccess\" value=\"always\">\n</param><embed src=\"$1\" type=\"application/x-shockwave-flash\" allowscriptaccess=\"always\" allowfullscreen=\"true\" width=\"425\" height=\"344\"></embed></object>", $_POST['textarea']);
?>