@Iggy
Well, the reason I suspect Flash is that I can play and edit full PAL video at 720x576 on my G4 Mac in a variety of formats without it breaking a sweat, yet it struggles to play a 360p Youtube clip. The same clip in any other format would surely play easily as well as e.g. ripped DVDs, Divx etc.
Bottom line is that the G4@1.33GHz has plenty of horsepower to decode video in any format other than Flash, so I have to conclude that Flash is the issue. It's well known that for a long time Flash was hobbled on the Apple because of restrictions imposed by Apple themselves regarding acceleration, and only the extra power of the G5 and Core 2 chips made it usable.