I still don't like the quality because of the low bitrate. 720p is three times as large as 640x480 (the regular "high quality" youtube videos are 640x480). But, the bitrate is equal. For the quality to be exactly equal, the bitrate of youtube HD videos would have to be 6000kbps. Otherwise, it's like trying to shove a watermellon through a tailpipe. Sure, you could do it, but you would have to cut it up first.
I mean, when it isn't fullscreen it looks good because it is scaled down and you cannot see the compression artifacts as easy. But when you make it fullscreen it is atrocious.