Its maddening for sure. It seems to be a memory leak issue where videos will play and then slow down. Happens on all 3 of my PS3 slims. The thing that really sucks is that I got a Panasonic smart TV and it has a Youtube app that plays video flawlessly but doesn't load all my favorites or channels like PS3 app does. Its supposted to but instead shows an "unable to retrieve" on all my lists except for favories.
And its not my internet connection. I have one directly connected to the router and another has a N protocol wireless game adapter that its plugged into.