I've always had problems viewing HTML5 videos in desktop Safari through Lion, often even YouTube claims that videos are "unavailable" even when they work on iPad and when they do work the videos are jumpy. In mountain lion/the most recent version of Safari it seems like something is even more broken. Sites with videos that did work don't anymore (problems loading) and the video player has graphical issues. Flash shouldn't be smoother than HTML, so Apple! Get on that!!!