Previewed at WWDC, launching in the fall.
YouTube Live Today on Apple TV & Coming to the iPhone [Update]
Apple today announced that iPhone users will be able to enjoy YouTube's originally-created content on their iPhones when they begin shipping on June 29. A new Apple-designed application on iPhone will wirelessly stream YouTube's content to iPhone over Wi-Fi or EDGE networks and play it on iPhone's stunning 3.5 inch display.
Apple TV users can download a free update via the built-in software update to enable YouTube content.
Both AppleTV and the iPhone will play YouTube content that has been reencoded into the h.264 video format. 10,000 of YouTube's videos have been converted so far with the remainder expected by the fall.
The press release claims that h.264 was chosen "to achieve higher video quality and longer battery life on mobile devices".
Indeed, reports coming out of WWDC is that one of Apple's justifications of avoiding Flash video playback on the iPhone is for improved battery life. The iPhone contains dedicated hardware capable of playing h.264 content, while Flash content would require more intensive use of the iPhone's CPU, resulting in higher battery drain.
Update: Apple has updated their iPhone pages with a demo of YouTube on iPhone and a new YouTube icon filling in the 12th spot on the iPhone's application list.