I had the very same problem with Tubesock. The program does not format youtube clips in the correct format for iPods. You can get around this by downloading VisualHub, which will convert the clip to the right format:
http://www.techspansion.com/visualhub/. After you have downloaded the program, follow these steps.
1. Copy the clip onto your desktop (drag the icon from iTunes).
2. Drag the icon of the clip from your desktop into VisualHub.
3. In the Visual Hub window, choose optimize for iPod or optimize for all (if you want to play the clip on an iPod, iPhone, and Apple TV).
4. Click the start button.
5. When the conversion has completed, you will be alerted by a bell.
6. On your desktop, look for an icon with a file extension ending in mp4.mp4.
7. Drag the icon into your iPod.
That's it!
PowerBook G4 Mac OS X (10.4.10)