A YouTube Android Player API was 'pre-announced' at Google I/O, and while the full announcement and release is still in the future, the API is available for use now.
Displaying and viewing YouTube content on Android devices currently means using the YouTube app or some compromise in ease of use or functionality. The new API will provide a native YouTube video experience, with full player controls from within your apps, meaning your users can view the videos without leaving your app.
You can get an overview of the API from the Google I/O session video:
The API is suitable for use with Android on mobiles, tablets and Google TV, and you’ll be able to carry out the basic coding to integrate videos in just three lines. The API has automatic support for full-screen change of orientation, and will adjust the quality of the stream according to the strength of the network connection. There’s even support for paid content.
There are actually several YouTube APIs alongside a collection of tools. The Data API can be used to carry out most of the operations a normal YouTube user can on the YouTube website.
In either case, you can mimic user actions such as pausing the video, seeking ahead, and muting the sound. You can also poll the status of the player and listen for events, to let your code react to whatever the player is currently doing.
The Data API gives you everything you need to program a device or server-side logic for a website. You can use it to search for videos, retrieve standard feeds, and see related content. The API also lets your apps authenticate as a user to upload videos, and to modify user playlists. It gives you the means to work programmatically with the video and user information stored on YouTube.
The API manages the XML and HTTP requests and responses that the YouTube API servers expect and return. To make working with the API easier, Google has put together a number of client libraries that abstract the API into a language-specific object model, including Java, .NET, PHP, and Python.