Just noticed the degradation of quality in commercial videos on Youtube. One thing to consider is the menu interface which looks slicker and operates without much lag.
The quality must have something to do with their new policy of embedding ads and DRM (digital rights management) onto the videos. What did they do? Downloaded the FLV files and embedded DRM onto the clip. Then re-uploaded the files. Quality loss was experienced between file transfers and editing flash-formatted video clips. Expect quality to get back to their regular selves to newer videos.
Don’t believe me? Try watching the “Paramore” music video or “Jeep” ad below.
Note: this does not seem to affect regular user uploaded videos.
Edit 10/18/07: Looks like the quality drop has been fixed.