Here's my hands on with the Youtube functionality that fell into our waiting arms Apple TV with version 1.1. I mean it's a pure video play, so I figured I had to get the video walk through going for you guys. It's simple, except for a few things I noticed.
•Fast forward is progressive. The longer you hold it down the faster it goes.
•Videos stream easily fast enough for playback, and start quickly. But you can't FF past what's been downloaded
•Once you log in with a YouTube account, you can rate videos and add them to your favorite list. That favorite list is synced with your account online. (So you can access it from your Mac/PC.)
•Not many movies are available (around 10,000 will be ready by the 29th, for iPhone) but by fall, everything will be encoded for AppleTV and the iPhone.
Apple Announced Youtube on Apple TV [Gizmodo]