Youtube quality
(320x240) roughly equals to the movie quality of a video cd. It's not enough compared to the basic pal cable service (720x525). They should at least go for 640x480.
Youtube capability sounds very stupid when a device can potentionally browse the internet. Adding a flash capable browser makes the device compatible with almost all flash based video services. Adding download capability to this is very simple and could be done with a smal add-on. Playing back saved youtube content offline can be done with the classical mplayer media player that also has good windows media compatibility.
About adding component to a device: component is just a simple conversion from the analog vga signal to a differencial format, adding svideo is just a simple conversion from component to two channel mode. Also it's easy to mix the two channels of svideo into a single composite output. All this above can be output on a dvi-i connector (for vga/dvi) and a 4 contact 3.5 phono jack (configurable to rgb/component/svideo/composite). Adding digital 5.1 audio output can be done with 3 combined optical/electric phono jacks, providing a stereo analog/spif coax/spidf optical output for every 3.5 jack. It's a small and cheap way to do it and users can select the right brakeout cable avoiding large and unused rows of different connectors. (for tv output the chip must use a nonstandard video mode or have a dual dvi-i/tv-out mode) For hdmi, the dvi output and one spdif output can be combined into a hdmi cable. It's just a question of 5 small connectors and some creativity when making breakout cables.