YouTube's John Harding, weigh on the current status of HTML5 video support. The gist of it: while HTML5 is great, it can't do everything YouTube (or most mainstream video sites) need. Harding explains point by point, beginning with the need for a standard video format for HTML5.
"Concerns about patents and licensing have prevented some browsers from supporting H.264; this in turn has prevented HTML5 spec from requiring support for a standard format. Google hopes to remedy this with WebM project and VP8. Google is open sourcing and contributing VP8 codec to WebM effort. Google, Mozilla, and Opera have all committed to support WebM, and we've already started making YouTube videos available in WebM format. Adobe has also committed to support VP8, the video codec for WebM, in an upcoming Flash Player release."
More Info: Flash and the HTML5