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As far as I can recall, the best you can do is connect to WiFi. You iPad will automatically choose better quality when on WiFi.

720p? No likely. Maybe somebody knows. I don't. I just talk. Talk and talk.

Oh hi!
 
You can't choose quality on youtube, iPad will always automatically pick the highest aviable quality (max 720p). But when You are using 3G network, quality will be very low, to prevent too high transfer usage, and it also can't be changed (on not jailbroken ipad ofc...).
 
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