Iphone4 YouTube quality

Are you watching them over WiFi or 3G. If it's 3G then your carrier compresses the video beyond recognition to save their bandwidth.

On WiFi i get high resolution video on mine.
 
Don't use the youtube app, that is crap quality.
Go to youtube on Safari and add that to your homescreen. :)
 
MiTube/MxTube can stream or download the HD versions, which are far better than HQ available via the youtube app or mobile site.
 
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