What's Happened To YouTube On iPhone 3G?!!?

Right. I finally fondled the iPhone 3G this morning (see prior post).

One aspect of it really worried me. I know I probably should have asked an Apple Rep, but I had a feeling they might have started pulling out their hair and gnashing their teeth if they saw what I was seeing. It was that bad.

I read earlier this week that Apple has basically grafted its own iTransmogrify feature into the latest version of Safari. Now people can see embedded YouTube videos, click on them, and the YouTube app will launch and play the video.

Right?

Ummm ... no.

It plays something, but if what I saw can be called video, then what Palm makes can be called supercomputers.

I tried several videos I've placed in this blog. Here are the direct YouTube links:

My Smart Car
‘Bourne Identity’ track by Moby
LADYTRON-GHOSTS (OFFICIAL)
LADYTRON - Ghosts
kIM NOVAk / Female Friends

Five vids should be a good testbed, no? And most of them are pretty recent, which means MP4 versions of each should have existed.

Uniformly, in every single instance, the video was horrible!

It was as if I was being sent a 120 x 180 video that was then enlarged. (And that enlargement didn't go edge-to-edge on the screen; it was centered with a big fat black border all around it!)

It was muddy, it was full of ginormous pixels, and it was an absolute travesty of video.

So what exactly is going on here now?

1) Has YouTube stopped converting FLV to MP4?

2) Has the YouTube app been changed to actually play FLV?

3) Is there any way to make it stop this and play the MP4 version when it's available?

4) Has AT&T throttled back on YouTube streaming video bandwidth?

If this is the new shape of YouTube on iPhone, Apple has just opened itself up to getting sued by Attorneys General all across this country. You can't go around showing crystal clear video in TV ads as an example of YouTube and then substitute it with that crap! That's clear bait and switch as well as misrepresentation and outright fraud.

The iPhone 3G in the upper left was showing: AT&T [five green bars] and a fat 3G icon, so I have to think it was doing all this stuff via 3G and not WiFi. (Speaking of which if that was 3G, what's the big deal? It's still a lot slower than WiFi! All you techmemers held your breath and pouted for 3G?!!)

Is there any explanation of this horror? And even if there is, has Steve Jobs himself witnessed this atrocity? You tell me he's OK with it?