Rebelgecko writes: It turns out the iPhone's mystery app is a custom Youtube viewer. The iPhone will play Youtube's videos using the H.264 codec for higher quality. From the look of it it will take advantage of the iPhone's screen design and touch capabilities much more than watching videos in the iPhone's version of Safari would. The videos can be streamed via a Wi-Fi connection or the EDGE network. Starting today the AppleTV will also play Youtube videos.
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