HD playback does not work

Try this:

Change this line of code in your plugin
if($youtubeoptions['hd']=='usehd') $ytsghd = 'hd=1'; else $ytsg = 'hd=0';

to this (for 720p)

if($youtubeoptions['hd']=='usehd') $ytsghd = 'vq=hd720'; else $ytsg = 'hd=0';

or to this (for 1080p)

if($youtubeoptions['hd']=='usehd') $ytsghd = 'vq=hd1080'; else $ytsg = 'hd=0';