Ok...I'll give the new code a try...
[30 minutes later]
After playing around with the code, I'm afraid it's not going to work.
It's a good idea but the problem is that if the linked YouTube video does NOT have a High Quality/HD version, the video won't link up properly and won't play embedded. For better or worse, if you want the HQ/HD stream to play, you have to start playing the video and then click on the HD icon in the YouTube control bar. This will start the video in HQ/HD mode.
So take a look at the two videos below. The first one has an HD button that appears after you start playing the video. Start playing the video, notice the quality, then click the HD button and watch the quality improve. Then do the same for the second video. But wait! There's no HD button on the second video. That's because that particular video didn't include an HD stream. If I was using the YouTube hack that web page suggested, the second video wouldn't even play the low quality stream. (But in fairness, the guy says that on the web page - that it won't work with non-HD videos).
Oh well...great suggestion if only we could get it to work. Maybe YouTube will come up with some new embed code that will do the trick for us.