I just messed around with my Droid and figured something out.
I have watched youtube video before and always had to click more > high quality
I have now signed into my youtube account which is merged with my gmail account. After I am signed on, it remembers that this unit uses high quality video. Now I do not have to make that selection to watch in high quality.
So, sign into your youtube account, it will then default to high quality.
stock droid with forced 2.1 update
UPDATE: jumped to the conclusion it would stay.. it does not.
no default to high quality...