Wow, this actually does make a lot of difference when watching youTube videos. Been watching a few 720p videos in full screen and the Macbook Pro fan stays off. Looking at the activity monitor history graph (I always have it in the dock), it looks like the CPU doesn't care at all whether you're watching a 720p video on youTube or just casually typing in this here forum. Almost all black on the graph.
You need to download and run the flash uninstaller and then the installer of the new flash version, then restart your browsers when the installer tells you to.
I have one of the first 13" unibody Macbook Pros with NVidia 9400M graphics.
You know what's happening? Flash simply offloads CONTAINERIZED video to eligible GPUs, nothing else - in other words, this is not a Flash improvement, it's just moving the natural burden of an AVI or MP4 video somewhere else. But try it on Jim Carrey's site and you will see that Shockwave animations continue to consume 150% of the CPU...at least on mine and a "few" others', that is.