According to iLounge's research, iPad’s built-in YouTube application strips both standard and HD videos to a dramatically lower resolution over the cellular data connection-- instead of staying at a higher quality setting.
Other third-party applications (such as ABC's video player-- for "Lost" fans) refuse to work at all over the cellular connection, producing a notification pop-up that states, “Please connect to a Wi-Fi network to use this application. Cellular networks are not supported at this time.”
Great-- spend a lot of money to upgrade to a device with a larger screen just to see video at a lower resolution. Great job, Apple!