Beating this dead horse
There are about a bajillion posts on this, but since I like typing and being helpful, I will hook you up.
One program will solve this "issue": Mactubes. It is a standalone app (make sure you get the latest version) that allows you, once you have set the player to quicktime, to play youtube videos outside of a browser, and without flash. Make sure you have Perian installed as well. As an added bonus, you can easily download the youtube videos with mactubes as well.
If you don't like mactubes for some reason, there is also Youview, its another standalone player that does the same thing, using ffmpeg instead of quicktime. Its free, but you have to pay the developer to be able to download though
If you must watch your youtube INSIDE the browser, well, I can help there too. Tenfourfox or Auroafox are you friends. You must have one of those. Download the Firefox Greasemonkey extension, then head over to userscripts.org. There you will search for, then install a greasemonkey script called "viewtube". This will replace flash with quicktime and you should be able to handle 360p video fine within the browser.
If you have Safari and Safariwebkit, then you can install the great click to plugin safari extension, which essentially does the same thing, replacing flash with quicktime. Apple optimized quicktime for h.264, so it does a better job than most at playing it back. Make sure you have the very latest quicktime available for PPC.
Sadly you are too late for the Coreplayer experience. Coreplayer was by far the best at playing back HD files on PPC macs, I could STREAM 720p from youtube on my 1.2 Ghz G4 ibook. Developers went under and Coreplayer is locked up forever, and you'll never get a copy, sorry.