This is really bugging me, because I had the exact same problem for many months, and I cannot remember how I fixed it.
Have you tried right-clicking on the video, going to "settings", and unticking "enable hardware acceleration"?
Funny thing is, when I tried that on a Youtube video just now, it wouldn't bring up the "settings" option. Instead, it informs me that somewhere along the way, I apparently switched from using Flash to play Youtube videos, to HTML5 video player...? I don't even remember doing that! ... Ah, wait, it's telling me "You are in a trial for HTML5 video on YouTube. Some users of supported browsers are automatically entered in to the trial. If you wish to leave the trial, use the link at the bottom. HTML5 is a new browser technology that allows us to show videos without the Flash plugin."
So apparently, it automatically entered me into the trial for HTML5. Well, whatever. It works anyway. It would have been nice if they'd asked my permission first, since I had no idea. The info screen does give me a way to go back to Flash, but since this HTML5 is working so well, I don't dare shut it off now.
More stuff on HTML5:
We support browsers that support both the video tag in HTML5 and either the h.264 video codec or the WebM format (with VP8 codec). These include:
•Firefox 4 (WebM, Available here)
•Google Chrome (WebM)
•Opera 10.6+ (WebM, Available here)
•Apple Safari (h.264, version 4+)
•Microsoft Internet Explorer 9 (h.264, Available here, WebM support avaliable here)
•Microsoft Internet Explorer 6, 7, or 8 with Google Chrome Frame installed (Get Google Chrome Frame)
•Fullscreen support is partially implemented. Pressing the fullscreen button will expand the player to fill your browser. If your browser supports a fullscreen option, you can then use that to truly fill the screen
•If you want to find videos with WebM formats available, you can use the Advanced Search options to look for them (or just add &webm=1 to any search URL)
Additional Restrictions (we are working on these!)
•Videos with ads are not supported (they will play in the Flash player)
•On Firefox and Opera, only videos with WebM transcodes will play in HTML5
•If you've opted in to other testtube experiments, you may not get the HTML5 player (Feather is supported, though)"
EDIT: If anyone else is having problems using Flash with YouTube, You can join the HTML5 Video Player Trial by following the instructions on this page.
Or, this direct link
should automatically start you on the HTML5 video player trial.
"I've been fighting with reality for over thirty-five years, and I'm happy to say that I finally won out over it." -- Elwood P. Dowd