I assume you are not counting ones with Samsung's Pentile matrix AMOLED HD screen such as the Nexus/Note? But I would personally rather Nexus or Note's AMOLED any day than the smaller and non-AMOLED Rezound's S-LCD screen. Once you get used to AMOLED, it's hard to go back to an LCD.

I guess Nokia not making their own powerful SoC's became an issue. e.g. Samsung Galaxy S released in mid 2010 could play up to 1080p high profile H264 videos and is more powerful than N9 using OMAP 3630 which was released 15-16 months after. Heck, DSP and GPU wise, 2010's Samsung Hummingbird SoC is still better than 2012 releasing Lumia 800/900 afaik. (Not entirely Nokia's fault as they had no other choice to run WP7 with)

For hardware fanatics, new Android phones with Quad core or dual core A15 etc released this year will be the one to get. (Such as Galaxy S3) Well, iPhone5 should use a similar SoC also. But in terms of "video playback" capability, SGS2 or Galaxy Note is already near-perfect so no need to wait unless you plan to play 2K or 4K videos on SGS3.

To answer original_z's questions, 480i youtube videos looks just fine on N9's display. If good quality source was used, it looks mighty fine on the N9's display. But it definitely doesn't look as crisp / detailed as a native 480p video file due to Youtube's high compression.

Seriously speaking, as much as I am a fan of N9, I can't recommend the N9 if you really want unhindered video playback capability and performance. If video playback is VERY important to you like it is for me due to long daily train commutes, get something which can play everything such as SGS2/Note etc. (even the SGS2 has a better quality screen and size than N9)

PR1.2 won't create miracles. It's a hardware limitation of the OMAP 3630 SoC used in the N9 not being able to play 720p+ high profile H264 videos. The best PR1.2 can bring is proper 720p main profile H264 support which is currently a little broken in PR1.0/1.1.

N9 is awesome in many ways. But video playback isn't one of them. I'm really hoping Nokia will take at least one more swing at making a more powerful version of the N8 or N9. But I'm not sure if that will happen anytime soon....