I ran this through the forum at the longtail website and was told there was nothing that could be done, but wanted to run it by you.
It seems like a fairly significant obstacle to effectively using this with YouTube videos.
That is, on an iPhone or iPod Touch and I am guessing is the same with any iOS - when you click the video icon, it does not play but re-loads again with YouTube's player, requiring a user to click again to play the video.
I would think most users would think, "that is wierd - that is not very user friendly", or, "huh, that seems broken", or something of the sort. Not a good impression you want to portray.
But I get the same result when I use HTML5 as the original setting and as such use the YouTube video player, without a playlist. Just seems that is it.
Is there any workaround you know of?