Update:
I have made a small standalone plugin for chrome that gives you more control over the size: you can download TubeSizer here.

Some of you are like me, and we have large monitors and when I say monitors I mean MonitorS! I run two 24″ Monitors @ 1920×1080 side by side and like to work on multiple things at once. One of the things I often do is throw up videos on my one monitor while working on the other (I’m doing it as I write this). What this means is fullscreen mode is out! The reason is because YouTube’s fullscreen often (sometimes not) will un-fullscreen the second you click on something in the other monitor. Also, fullscreen mode obstructs the navigation bar and in my case the task bar (as i watch movies on the right where my task bar is).

What this leaves is YouTube out of fullscreen, and YouTube’s “Large Player”. The problem is, YouTube’s default size is miniature at this resolution, one may think CTRL+Scroll (Zoom in the browser) is the natural solution to this, however this poses some problems. The zoom technique employed by most browsers is a software solution; this means the processor is scaling everything up on the fly as we go, while I have a pretty fast machine, this can sometimes produce a slight lag when viewing.

So basically I’ve loaded up Stylebot (For Chrome), a user.css implementation (Firefox users may already know about user.css) that basically allows me to have custom styles for certain websites!

The following script:

/** Obsolete as of Oct 2012 **

div.medium {
    width: 1280px;
    height: 720px;
}

.medium #watch-player {
    height: 720px;
    width: 1280px;
}

**/

Update, As of October, 2012 Youtube changed their theme enough to break this script, below is the updated CSS:

.watch-medium #watch7-player {
    height: 720px;
    width: 1280px;
}

Will make the “Large Player” of youtube be 1280×720 by default instead of 960x500ish. This is a comfortable viewing size that doesn’t sacrifice the ability to access the rest of youtube easily.

Before anyone mentions it, this doesn’t set the video quality of the playback to 720p by default, it only makes the viewport that size for playback. The benefit of this is that any video card accelleration the browser applies to the video viewport (FLASH or HTML5) will be applied to the 720p viewport and playback is smooth.