From the YouTube blog,
Over the years we've heard a lot of feedback from you about what you'd like to change about YouTube, and the size of our video player is always top of mind. That's why today we're excited to announce a bigger YouTube player.
We're expanding the width of the page to 960 pixels to better reflect the quality of the videos you create and the screens that you use to watch them. This new, wider player is in a widescreen aspect ratio which we hope will provide you with a cleaner, more powerful viewing experience. And don't worry, your 4:3 aspect ratio videos will play just fine in this new player.
As always, we welcome your feedback and encourage you to share your thoughts with us on this exciting, new change happening for all videos on YouTube.
Have fun watching!
The YouTube Team
To see a great comparison of the different viewing quality of the old videos vs. the new videos you can check out webmonkey's great comparison.