Well I assume he meant being able to watch YouTube videos on the Pearl without downloading, in other words "streamed" or "live."
It's common knowledge that anyone can use your "workarounds" such as downloading or "ripping" YouTube videos off of their Site, converting them into Pearl format, then placing them on the Pearl's MicroSD chip.
That is not the same as watching YouTube videos like we do on our PC's.
And to give him the technical answer, there are two reasons why he can't play streamed YouTube videos on his Pearl, 1) the browser has limited functionality, aka there is no flash player or capability to play streamed video; and 2) the Pearl's EDGE speed is way too slow to play streamed video. When 3G come, yes, but not at this time.