I just figured out how to get a little higher video from Youtube.
1/ sign up for a free "director's account"
2/ upload your video at 640x480
3/ add "&fmt=18" to the end of your video address when you want people to go to the "HQ" version instead of the SD one.
For example, here is a video at regular Youtube resolution:
and here is the same video at "HQ" resolution:
Looks much better don't you think?
Now if I can just figure out how to embed at the higher resolution....