We thought that Totem was living in a soft, gray, area by using YouTube GData API to do video searches, and then accessing direct streams that were of the quality expected by users, and in formats that meant out-of-the-box support for most Linux distributions (eg. using Web-M).
Turns out not. I won't make a whole scene about the way that this problem was brought up to me, but let's say that it wasn't the way I would have expected a corporation like Google dealing with things.
After a multitude of e-mails back and forth, I'm afraid that YouTube stuck to its guns, and I was repeatedly told about the "supported" solutions (embedding Flash was even proposed as a solution!).
So Totem will soon be playing your YouTube videos in crappy quality. Some of you with faster computers and better connections will be switching from full-HD streams to 176x144 videos.
If you want decent desktop integration with high-quality streams, feel free to "star" this GData bug report.