The Verge reports that they have more details on the new YouTube app which will come from the agreement between Google and Microsoft to work together.
They reveal that Microsoft will have to use the usual IFRAME method to embed the videos, the same as any web page, which would ultimately give Google full control over whatever content is displayed at the other end.
The Verge notes this leaves Windows Phone users basically back at square one – with a YouTube app that is no better than visiting m.youtube.com.
I think we will have to see what final app is released, and depending on the result will only then be able to call this adventure a victory or defeat.