More and more Android phones are coming out with the ability to play 720p HD movies and videos. With that in mind, YouTube has upgraded their Android app to support HD video playback on some of those devices.
The HD update is based on your Android phone’s screen size and resolution. Also, phonearena warns that the HD update isn’t working on every phone that it should. If you have an HD compatible phone and you haven’t updated it yet, go to the Android market and see if the update is available under “my apps”.
U.S. Android phones with the configuration needed to support YouTube HD, should have a better chance of getting it than those abroad.
Source: Phone Arena