What's the fetish with YouTube HD? No offense, but if I expect to see true HD I will use a real player. First, you're watching it inside a browser via plugin. Honestly, I don't feel much YouTube HD video is something we need to see in HD.
QuickTime isn't even easy on the CPU either. There are certain programs that play HD much better like VLC or Plex. iTunes even states needs 2 GHz min to play HD.
A lot of this is changing too. With Snow Leopard, QuickTime X, H.264 and 9400m, video is getting easier for the Mac.
Someone in the reply mentioned 1.8 GHz and SSD, but that leads me to believe wasn't even an Nvidia GPU and original Intel MBA which was never doable.
The MBA's GPU is throttled. It's a thin and lightweight Mac. It does require observance of limitations. While an MBP may play four HD videos at the same time, who can really watch them all at once.
If you're so into HD that every video on YouTube needs to be played in HD then go buy a Windows PC! Cause honest to God, software is much better in the Windows environment. Flash hits a Windows CPU about half as much as in OS X. QuickTime and HD playback and etc are all much easier in the Windows environment. And truthfully PPC was far worse than Intel has been for video playback.
Let's face it the Mac is ALL about compromise. Whether software or limited to Apple's outdated hardware, refusal to accept/acknowledge BluRay, or stuck with shared RAM on Macs like iMac, MBP, and etc... The Mac IS Compromise! The MBA is a little more compromise for thinner, lightweight, and beauty... I will gladly give the last LITTLE bit to have my MBA... FACE IT... WE ALL HERE ARE WILLING TO COMPROMISE to use our computers made of aluminum for a much better look and feel but with processors a few years old, limited other components, and extremely limited software just to use OS X!!!
You only want to spend $1000, go buy a PC... Heck get a 17" display with a great dedicated graphics card and a beautiful display. Get 4 GB RAM and a 3 GHz CPU. Get Windows 7, Windows Media Player, BLURAY, and HDMI! Get your sound through the cable too! Here's the thing though, when you connect to the Internet don't download the wrong thing... or your PC will get a Virus... but even if you use NAV, and your CPU is busy with NAV usage YOU WILL STILL GET BETTER PLAYBACK OF HD VIDEO! And you can watch natively with your BluRay!