Many people find they have issues with YouTube apps, because they're often written to be as generic as possible (ie not for any specific phone), and as a result, it's often easier to get a stable playback by opening a browser and going to http://m.youtube.com
If that doesn't help, try checking your handset's internet settings to see if it has any Proxy options configured. The address is:
(this might be written as 22.214.171.124:8080)
Removing these details is a common fix for video streaming issues.
There's a more detailed guide at http://bit.ly/giffytube