Tried that video on one of my stock (7792) Hannspads.
If I open the link and have it use the youtube app, it plays perfectly, with apparently HD enabled (tried it by touching the button and having it underlined in red, and not). No glitches, stuttering, or paused - just smooth, no frame drop. Didn't try then outputting it via HDMI, though.
If I had it open those in a browser version of youtube - either the stock browser (which I personally find works best for flash content), or opera and it just sat there doing nothing for a while - whether that's because it was trying to use youtube as a mobile site and doesn't like HD content, or just didn't want to play it, I'm not sure.
Edit: Something I've been meaning to mention, I tried one of the HD videos I had (think it was only 720p) and noticed a huge difference in MX video when I turned off hardware acceleration. This is all natively on the Hannspad, I wasn't using HDMI - when I played it using software decoding, it was glitchy with some frame drops, and there was something amiss with audio sync. When I played it back using HW acceleration it was perfect, no glitches, apparent frame drops or issue with audio sync, just smooth and perfect. So there's obviously a clear difference between software and hardware decoding even at not full HD resolution (eg 720p).
But plays back perfectly using the youtube app in HD, directly on the Hannspad, anyways.