It's a stand alone program that lets you search and watch youtube videos.
Or...you can go all out and install Manila 2d, which creates an interface very similar to the one that is on the Diamond or Touch Pro and also includes their actual Youtube application.
You can find a rather long thread about it over at xda-developers:
Basic idea here is that you just install all the files (like 10) on your phone. Do some reading there, things might have changed since I installed "Update 19"
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