It shouldn't be. Is it possible for you to uninstall the YouTube app and reinstall it? I don't have an iPhone yet, mine arrives tomorrow and I haven't looked at You Tube on my iPad 2 so not sure.
Yeah I said the same thing, videos are blurry unless you're streaming over wifi. I hope this improves because I could watch stuff straight from my phone's Internet with the other version and had a clear playback.
I agree the new youtube app has very low quality video....at least on the i5. I'm getting 25mbps down off of my wifi so there is no issue there. I have the Jasmine app and it works good but I'd still like for the youtube app to be updated.....and Netflix for that matter, lol.
I had the exact same issue as many of you, this is how I was able to resolve this. I uninstalled the YouTube app and reset the phone. Went into safari to the YouTube website and viewed a video, switched the video to HQ with the button. I restarted the browser app and made sure the next playing video was HQ. I then reinstalled the app and it was HQ in the videos I attempt to play. Apparently to settings are pulled from the web version when you install the app so you have to set to HQ before install of the app. Cheers!!