Yeah, I am less than excited about streaming from YouTube due to their horrid video quality. I can only imagine how foul the image would look on a TV. Its bad enough in a 7" diag window. I find it unwatchable when I scall it to full screen on my monitor.
The PS3 is supposed to get a video download service sometime this summer, but the whole matter seems short on details.
All in all, Ill stick with physical discs until the whole market matures a bit and video quality is of a certain minimum level.
D>M>