Why is VLC not playing youtube files for me?

Have you copied the WHOLE URL and not just the part with /watch?v=... ?
I do not have an older system to test an older version of VLC though.

You *shouldn't* need Flash at all if you're watching them via VLC. Make sure you choose "Open Network Stream" and make sure the entire address is placed in there, including youtube.com. For example, this would need to be pasted in:

youtube.com/watch?v=6eKXXA_Z6wo (it's safe for work)

If I remember correctly, direct Youtube playback doesn't work in VLC versions that ancient. I remember testing the last release working on Panther and finding that functionality missing, so I guess it won't work in Jaguar.
If I am wrong than the issue is the lack of an updated lua script in /Applications/VLC.app/Contents/MacOS/share/lua/playlist/youtube.luac
Download the latest version of VLC (at the moment 2.0.8) copy the corresponding youtube.luac file (you will have to right click on VLC icon, choose "Show package content", than navigate to /Contents/MacOS/share/lua/playlist) and paste it in your VLC installation at the path I gave a few lines above.

I have no idea what other options you have in 10.2.8, but try this bookmarklet:
http://marklets.com/PwnYouTube.aspx
If it works in your browser (big if, considering the lack of modern browsers in Jaguar) it will give you download links to the video files embedded in the Youtube page you are visiting. Copy one and open it in VLC. You should be able to get video playback.
If this doesn't work you could try getting the links from one of the many websites for Youtube downloads (but beware of the ones requiring Java).
Good luck, and let us know if this worked for you.

PS: just for curiosity, what browser are you using in 10.2.8?

B-G's answer is the one you should be looking at. YouTube support was broken some time ago by one of the LUA extensions and is easily fixable by downloading the latest one he linked.

Then, as I remembered, that version of VLC doesn't support direct Youtube playback. You can still watch YT videos on it, but you'll have to use download links to the actual video files.

Actually, in the latest VLC player versions, there is a problem with youtube.lauc file which not let the users to play the YouTube videos.
You can simply update the youtube.lauc code with the code given here in this link: https://git.videolan.org/?p=vlc.git;a=blob_plain;f=share/lua/playlist/youtube.lua;hb=HEAD

or simply see this guide: https://www.how2shout.com/how-to/how-to-play-and-download-youtube-videos-on-vlc-media-player.html

RamsonM said:

Actually, in the latest VLC player versions, there is a problem with youtube.lauc file which not let the users to play the YouTube videos.
You can simply update the youtube.lauc code with the code given here in this link: https://git.videolan.org/?p=vlc.git;a=blob_plain;f=share/lua/playlist/youtube.lua;hb=HEAD

or simply see this guide: https://www.how2shout.com/how-to/how-to-play-and-download-youtube-videos-on-vlc-media-player.html

Click to expand...

Unfortunately doesn't work with older versions of VLC suited to G4s.

Cut and paste the YouTube video link to a place like this: https://qdownloader.net/youtube-video-downloader

Then you can play it using VLC, just drag and drop the file, or have it set for auto play on VLC if you want.