The YouTube app is designed specifically to take advantage of all the capabilities of iPad.
Content is organized in a new way, so it’s easy to navigate and watch. Tap what you want to see, and the video automatically appears full screen. Use your fingers to play, pause, and advance through a video.
But I have two complains about the YouTube app. First of all, to be able to use all the features you need to register yourself a YouTube account. Secondly, most of the time when you will be surfing the Internet with the Safari browser and you will try to watch a video from YouTube, you will be transfered directly into the YouTube app. It makes the whole experience frustrating. But overall, this is a nicely designed and optimized app for the iPad.