<div class="replacement">
    <img class="top-img" src="http://placekitten.com/560/315" alt="Kitten">
    <iframe class="video" width="560" height="315" src="http://www.youtube.com/embed/H93n-k3SkiQ?rel=0&autoplay=1" frameborder="0" allowfullscreen></iframe>
</div>

.replacement {
    position: relative;
}
.top-img {
    position: absolute;
}

jQuery(document).ready(function($) {
    $('.replacement .top-img').on('mouseenter', function () {
        $(this).fadeOut(500);
    });
});