Who doesn't love Youtube (this month)? In fact some of the stuff I like so much that I want to keep it permanently on my computer. While there are applications out there like TubeSock, I think the way I do it provides more options.
I start by grabbing the flash file from Youtube with the free application PodTube. This little utility grabs the flash movie from the frontmost Safari window and loads it onto the desktop. While PodTube has settings to convert the file to an iPod playable format, I have not had any luck getting it to work. However, I am a registered user of Hawkeye. This is a great utility that converts files between a variety of formats. It can convert DVD files to play on iPods!
After Podtube places the flash file on the desktop, just import into Hawkeye and convert to MP4 (or any number of other formats). Hawkeye will even add the file to iTunes for you.