Let's face it: Flash on the Mac is a dog. Actually, that's an insult to dogs, which are known for running fast. Flash for Mac is such a an unoptimized beast that you can expect it will suck up as much CPU as possible, even for the simplest of videos.
My first line of defense is ClickToFlash (which I've mentioned before), but the folks over at NeoSmart have another solution, at least for YouTube: HTML5.
By using the newest version of HTML, they have devised a system to send YouTube videos directly to any MP4 decoder on your computer. Simply go to their custom web page and paste the YouTube URL into the field. In a moment you will be presented with a clean window showing you the video, as well as a download link for the MP4 version.
They also have a Greasemonkey/UserScript available which will add a link to all YouTube pages. That's nice, but what I was really looking for was a bookmarklet I could keep in my Bookmarks Bar and just click on when I was on a YouTube page. I didn't find one, so I made one. Drag (don't click!) this link to your Bookmarks Bar: FlashFree YouTube and you can easily access the NeoSmart/HTML5 version.
How does it work? Superbly well. I tested it using Safari, and watching a YouTube video through NeoSmart had no noticeable impact on my CPU at all.
I've nearly given up hope for a version of Flash for Mac that doesn't stink. Until then, ClickToFlash and NeoSmart's HTML5 YouTube are a great combination to make your web surfing more enjoyable.
(Update: NeoSmart is being blocked by Google/YouTube. It turns out that if you load YouTube videos on YouTube.com while having ClickToFlash installed, they play through QuckTime, not Flash. So download ClickToFlash.)