Thank you for the fast replay.
I do have a pr1.3 and also have the Community SSU.
Do I still have to restore the flash ??
I am a newbie so I don't want to mess everything up - eventually by restoring the flash because as I told you before the rest of the web sites with flash works fine. Weird !

p.s I fixed it.
I recently have bought my phone second hand so all the apps were there. I went to Tweak Flash and noticed that the field - "Current version reported" was: Android 10.1.61 (FroYo) . WTF ?? When I switched to - "Linux 10.0.45 (Desktop)" - the youtube videos are playing fine !!!