Saw you mentioned having HD being perfectly playable with 720p on youtube with a pentium 4,my experience even with a windows 7 installation on a ssd with a gtx650 still produced laggy stuttering video playback.
Certain hidden menu option or a special browser?Was using google chrome and couldn't produce stutter free 720p and above.
Hmm I wish I could tell you what went wrong with your setup. Was the P4 a HT model of at least ~3Ghz?
Sometimes flash can be a ah heck.
My recipe for good P4 video performance :
P4 of 3.0C or newer with adequate cooler (no throttling allowed).
Make sure HT is on, many bioses in HPs/Dells/etc default to 'off' for some unknown reason.
Nvidia card of at least 8xxx series or AMD card of at least 5xxx series (ideally newer, but these are good enough for respectable 2d acceleration).
32-Bit XP or Win7 OS install w/2GB-3GB of ram.
Set resolution to 1280x720, 1440x900, that range usually does best. Weirdly, works best with aero ON if using Win7. With a 3.2C or better along with a good card, usually can even get BluRay to play.
And then I use IE with absolutely no toolbars/etc/anything. Totally stripped to the bone. I don't know why, but Chrome and even Firefox seem to bog with P4s, while IE does just fine. I also use CCCP for the codec pack to play MKV/etc, with WMP. VLC is nice, but doesn't play as nicely with super low end CPUs like the P4 in my experience.
With that checklist, I can
almost always get good 720p performance. 1080p depends heavily on the type of file. Lower bitrate rips work fine, but really dense 10GB+ 1080p is rather difficult to get working well with really low end PCs.
On more borderline PCs, sometimes I can get 720p to work in the browser window, but full screen bogs it too much.