YouTube doesn't innovate too much and many of the features introduced lately have already been available elsewhere. Unlike other video sharing websites, YouTube is entering the mainstream and a big audience means a lot of pressure and responsibility.
CNet reports that YouTube intends to offer higher-quality video streams in the near future. "Although YouTube's goal, [Steve Chen] said, is to make the site's vast library of content available to everyone, and that requires a fairly low-bitrate stream, the service is testing a player that detects the speed of the viewer's Net connection and serves up higher-quality video if they want it." Steve Chen said that the high-quality streams will be available in the next months, but only for some of the videos. This is probably the reason why YouTube's bulk uploader increased the size limit for a video from 100 MB to 1 GB.
According to Wikipedia, "YouTube's video playback technology is based on Macromedia's Flash Player 7 and uses the Sorenson Spark H.263 video codec. (...) [The video] has pixel dimensions of 320 by 240 and runs at 25 frames per second. The maximum data rate is 300kbit/s." Flash Player 8 introduced a better codec: On2 TrueMotion VP6, which is used by blip.tv.
YouTube recommends to use these settings when you upload videos: MPEG4 format, 640x480 resolution, MP3 audio and 30 frames per second.
Other video sites already offer high-quality videos. Stage6 from DivX shows high resolution videos, but it requires a special plug-in. Vimeo has a channel for high definition videos: the maximum resolution is 1280 x 720, 12 times higher than the one available at YouTube.