That's quite simple: the youtube.js script replaces Flash with Odyssey's builtin HTML5 player.
However, if you're subscribed to the Youtube HTML5 program and that the video is available in this mode (which is still not the case for all videos), then Youtube's player will be used instead (and since Youtube's HTML5 mode seems to have this "not available" issue, i'd suggest not subscribing to the HTML5 program).

The youtube.js script is supplied with Odyssey, but it's not loaded by default. You just have to add it, as stated in the documentation, in Youtube section.

[ Edited by Fab 18.07.2012 - 00:48 ]