MacRumors.com

During today's All Things Digital interview with Walt Mossburg, Steve Jobs revealed that they would be introducing a free software update in the coming weeks to provide YouTube integration into the Apple TV:

“Wouldn’t it be great if you could see YouTube on your TV?”
Apple will be offering a free software upgrade come June that will allow Apple TV users to view YouTube videos on their televisions. Jobs demos the feature with a clip from “America’s Got Talent.” Odd choice.

Jobs also hinted at the possibility of high definition content coming sometime in the future for iTunes.

"You can buy movies off iTunes as well. It's pretty good quality -- we arent selling high def... at this point. But I think in the future that might change!

Apple has updated their Apple TV section on their website to demonstrate the YouTube functionality.