Discovered a odd behavior on one of our blogs, which we finally linked together with the "Parse links with http:// prefix same as httpv://" option.
When not parsing links with http:// as httpv:// the wrapper <span class="youtube"><iframe...></span> is not applied, and the option in admin (video template) doesn't work at all.
When parsing links with http:// as httpv:// is checked, the wrapper is always applied, and admin option (video template) works as a charm.
I guess it is not very usual to not parse http:// as httpv://, in fact this was due to a missed setting at our place. But as a result, the styling and everything else was smashed to bits as well, instead of just low resolution on movie.