I've been using my Flip without problem (and I love it, it's always in my bag), but I don't upload to YouTube- I post the movies on my MacGallery, and I think they look pretty great.
It's a bit time consuming, but I run the clips I want to post through iMovie 6 (the older version, which is on my new macbook) and save them all (Quicktime, full quality) then open them in iMovie 8.0 to edit and add effects, titles, etc. iMovie 8.0 rocks, and allows me to upload directly to my mac web gallery and email the link to multiple email addresses. The easy 'download' feature on the macgallery allows those I send the clip to to save it on their own machines- or transfer to their iPhones, which makes that extra step (running through iMovie 6 so I can open in iMovie 8) worthwhile.
Anyway, since I initially got the Flip, and downloaded the software off of it, I haven't had any problems with sound/picture in Quicktime, but I also ponied up the $29 to get the QT Pro version, don't know if that makes a difference. . . My software (inc. QT) is all up to date.
See:
http://gallery.mac.com/sheilae#100322 -for picture quality, not content 🙂