Ah, so that problem still persists. We noticed this before when 720p was the only HD option:
http://forum.doom9.org/showthread.php?p=1298070
It seemed if you uploaded at YouTube's native vertical resolution (480p or 720p) it would apparently halve the vertical resolution. My workaround for this was uploading at even higher resolutions, e.g. I would upscale PAL video to 1152 which would result in pretty good 720p and 480p. If your native resolution is 720p or 1080p, chopping off a few pixels might work too.