yes, but sadly websites cannot get around using a flash plugin or ogg theora on other platforms for streaming movies.

Well, given that Microsoft is on the list as well, 98% of all desktops are covered. The remaining 2% are welcome to purchase licensed third party codecs.

I don't want to sound offensive but just because some tiny portion of people would prefer a free/open solution, the large majority of the people (who actually use a commrecial OS and and don't really care about the whole thing just want YouTube working on their desktop) shouldn't be "punished".

Microsoft weren’t on that list when XP came out, so it’s hardly 2% of users.

Actually, it is new thing in Windows 7, so Vista also does not have H.264 decoder.

What about turning it around? 100% has access to open decoder, and if 2% wants to use licensed codec, they can. Remember, Theora was suggested as baseline codec, not as only codec.