MxTube is one of my favorite apps, for a full review check this page.

The app let’s you save all youtube video’s that are available for viewing on the iPhone or iPod Touch. 

However it has 1 limitation, it can only get the videos that are already converted to play on the iPhone. MxTubes developer knew of this problem and he started with the creation of MxTube 2. 

MxTube 2 will let you chose to search youtube mobile (the current video’s we see), Youtube.com (all video’s) and on video id. 

The app will encode the video’s that are not iPhone compatible in to the iPhone native format. 

Now this will be again one of my favorite apps. 

The developer has released a movie where he briefly goes over the new features.

Enjoy