Thankfully someone realised this and came up with a very good product: Vtap. Vtap video search engine was built from the ground up for mobile phones and not only index and allow you to search videos from all over the web including YouTube, MySpace, Dailymotion and many others, it then encodes the video on the fly and stream the appropriate format to your phone instantaneously!
I checked it out on my new iPhone and it works brilliantly!
Vtap gets around the problem of no Flash support on the iPhone and plays the video either via the built in YouTube and quick player after encoding the video into iPhone compatible format. The interface is slick and you can also subscribe to certain video feeds similar to the video feeds on YouTube.
Not only is Vtap the best video search app I have seen on any portable devices, I am not also very excited about the bound less possibilities mobile search technology will bring in the future.