Wow this was nasty.....
Did all 6 setups (not alternate method) in order with success at each step. (I already know how to get a \ to come up with the sym-space bar)

Try to visit http://m.youtube.com/ which quickly loads showing a custom version of youtube just for mobile devices. Looks all good so far.
I try a "Watch Video" link and then an error
(Title Bar) [Windows Media]
(Body) Alert
(Message) Cannot play back the file. The format is not supported.

Powered off phone, pulled batter for a minute, put back in and powered up; same issue

Video from http://m.youtube.com not flash?
Bought this I617 (Blackjack II) about 2 weeks ago. This a new version that the steps are not going to work?
(Mind you I have installed a software unlock, registry editor and unlocked the gps with out an issue.)

---Edit
This is not a fix imo but I installed opera 6.5 sp and I am able to enjoy http://m.youtube.com. I also want to add I had tried the Alternate Method mentioned prior to finding this site and thread. I did not do the step listed here but they were the same files from another site. They "kinda" worked but the videos were choppy. At least now I have opera as my browser. I suppose there is something in pocketIE or media player that has the youtube video blocked.

2nd Edit - Well I CANNOT enjoy http://m.youtube.com after all. Seconds after writing I look over at the video that was playing and it was garbage. (It has 1st started ok) Each video after that starts the garbles.