If your YouTube video fails to play on the iPad with the message “This movie format is not supported”, this may depend on its copyright status.
Copyrighted videos, containing for example a copyrighted sound-track, will not play from the iPad YouTube application, popping up the totally misleading message about the unsupported video format.
The truth is the the video format is usually perfectly fine. The problem is more likely related to the fact that YouTube cannot advertise within the iPad application or is unable to respect some contractual obligations toward the copyright owners.
You can check the copyright status of your videos from the “My Account – Videos” page on YouTube. If it says Video blocked in some countries. View Copyright Info. then your video may not play on the iPad, even from those countries for which it doesn’t seem to be blocked.
YouTube alternatives, like Vimeo, do not show the same behavior.
Hope this helps to clarify the issue many of us are having with their YouTube videos on iPad, even within the boundaries of the fair use.