YouTube Blog
We're excited to say that support for watching 1080p HD videos in full resolution is on its way. Starting next week, YouTube's HD mode will add support for viewing videos in 720p or 1080p, depending on the resolution of the original source, up from our maximum output of 720p today.

And those of you who have already uploaded in 1080p, don't worry. We're in the process of re-encoding your videos so we can show them the way you intended.

As an example you can check out the Dark Knight trailer in full HD here. That is if your computer can run it. If you right click the video and press "show video info" you can see the amount of bandwidth and the FPS your computer runs it at.
If this becomes popular it will require a staggering amount of bandwidth from YouTube. I'm quite surprised they allow it.

More examples:
Imaginarium of Dr Parnassus HD 1080p Trailer
Prince Of Persia the Movie HD 1080p trailer
Avatar HD 1080p Trailer