In this paper, we propose a system architecture for H.264/AVC video embedding transcoder (VET). In addition, the proposed platform-based design can seamlessly combine the MW-VET and decoder such that it can be dynamically configured to perform video decoding and transcoding alternatively or simultaneously. Furthermore, we perform the pruned design space exploration on the design of inter/intra prediction and the on-chip data bus width. Our proposed architecture provides a better tradeoff among execution cycles, hardware cost, resource utilization, and video quality because of the reconfigurable processing modules and the hybrid pipelining. As compared to the cascaded pixel domain transcoder that has the highest complexity, our hardware efficient VET can significantly reduce the hardware cost while maintaining similar rate-distortion performance. Finally, the proposed architecture is verified at system level using transaction level modeling (TLM) technique. From the simulation results, the proposed architecture with the best tradeoff configuration can achieve a transcoding rate up to 358 frames per second for SD video source while clocking at 162MHz.