The beta 2 update of the iPhone 3.2 SDK now has a browser. For those that wonder about the video experience, it is much like you would have in a regular browser.
Video plays inline in a web page. The Google videos may be played in high definition, and the samples look great.
Google still has not made all it’s video available in HTML 5 but there are many samples to try.
As of the latest SDK release Quicktime videos now also play inline and you can also play them in horizontal full screen mode by simply rotating the iPad and clicking the full screen button.