just wanted to let you know that i was able to follow both steps from your original post via the painful way and also the user script way. BTW i found that this script is rather superior for youtube:

http://userscripts.org/scripts/show/25105

it throws up a small download option that allows you to download to your device or if you copy the linked address and put it in mplayer it will stream. It's an extra step of course to watch youtube videos BUT it allows you to watch them in much better quality.

i wish someone would create a youtube app that grabs the mp4 file as it would negate this whole step but i digress.