It was suggested by Kintaro over at http://xenmediagallery that I should support the embed of YouTube playlists.
As Xen Media Gallery supports BB Code Media sites, it was pretty straight forward to set up a new site to allow the Gallery to support this.
You do not need Xen Media Gallery for this add-on. This is just a BB Code Media Site (but the concept was born mainly for the gallery)
The end result is this: http://xenmediagallery.com/media/testing-a-youtube-playlist.164/
It allows you to use a YouTube playlist URL like this: http://www.youtube.com/playlist?list=PLiG7LLwfY0tUAqwv3-fiPmqCPKiEgvUXU in your gallery or indeed your normal forum posts where the entire playlist will be embedded.
No need to use the Add-on Installer. Download the ZIP and extract the contents. Just install the add-on with the XML file. (There are no other files necessary).