Google updated its YouTube app for iOS yesterday. On the surface, the update doesn't look like much, but it includes an important new feature: the ability to change the quality of the video you are watching. Instead of leaving it up to Google, you now have control over video quality when using the app on your iPhone, iPad, or iPod -- provided you are on Wi-Fi. (Should you be brave enough to watch YouTube on a cellular connection, the quality is left to the whims of Google.)
After updating the app, you'll notice that a small button with three vertical dots in the upper-right corner of a video's playback controls. Tap this button when playing a video and it will call up three options: video quality, closed captioning, and flag as inappropriate. Tap the gear icon to call up the various video quality settings.
When you select the quality, it's set for only the video you're currently watching. When you start another video, the quality setting is always set to Auto. There is no way to set a default video quality for the app as a whole.