If you are looking for a good YouTube app for WP7, head over to XDA and check out the latest version of LazyWormApp's YouTube.  This stunning client is packed with features, including customized searching, favorites, full comment support and streaming of HQ videos over 3G and Wifi.  You can watch videos in preview form, or rotate your phone for full size.  There are a number of new features and improvements over the previous version:

New features
- Lazylist (customizable video feed)
- Author details and subscription
- Regional settings
- Recently played videos (history)

- Subtle interface animations
- Selectable description text (Nodo only)
- Preview playback while browsing comments & author
- Usability improvements
- Bug fixes

You can download the Marketplace or from the original thread.

Source: XDA