According to Google Operating System blog, YouTube videos are now held in the browser's cache by default, allowing people to watch them again and again without pauses once they have been downloaded. Videos will load from the browser's cache even if they're embedded in a web page, so this feature is not limited to YouTube's site.

YouTube managed to achieve something incredible: browsers now cache YouTube videos and you can load the same video multiple times from the local cache. Try to go to a YouTube video, wait until the video is buffered and then reload the page. You'll notice that the video starts instantly and you can watch it directly from your browser's cache. This works even if you close the tab and open the same page later.

If you have a slow Internet connection or if you frequently watch some videos, the new feature allows you to cache the videos, close the browser and watch the videos at a later time. You may want to increase the size of your browser's cache to preload longer videos. Here are YouTube's recommendations for dial-up connections:

"For best results, you may want to start the video player and then click on the PAUSE button immediately. Then, wait until the red progress bar has reached the end of the video before playing it. Allowing the entire video buffer lets you watch it without interruption."