iTransmogrify! – Watch embedded YouTube Videos on the iPhone
One feature missing from the iPhone and iPod Touch is Flash support for MobileSafari. Go to a page with an embeded YouTube video on it and all you get is a broken plugin icon. iTransmogrify! is a browser bookmarklet that allows embedded YouTube videos to play in the native YouTube player on the iPhone and iPod Touch. You can see it in action in the video above. Until Flash is officially supported, this is the best way to view embedded YouTube videos.
Actually I am not surprised that there are technical difficulties with the iphone. The more complex and sophisticated a piece of technology is, the more problems it is likely to have. ie. bugs