I did this for my Nexus One and it worked fine so I did it to my Fascinate and it works great.
This updated YouTube (YouTube 1.6.20 (E)) allows you to default to HQ through the settings menu.
There may be updated YouTube.apks floating around but I was to lazy to search but you would use the same commands.
1) You must be rooted
2) Push the new YouTube.apk to your sdcard (I downloaded YouTube.apk to my C:\temp folder. Adjust the command below to reflect where you downloaded the YouTube.apk
3) Backup your existing YouTube.apk in case you need to restore it
adb push C:\temp\YouTube.apk /sdcard/
* You may get an error that says "mv: can't preserve ownership of '/sdcard/backupapps/YouTube.apk': Operation not
# mount -t rfs -o remount,rw /dev/block/stl9 /system
# busybox mv /system/app/YouTube.apk /sdcard/backupapps/YouTube.apk
permitted"... Just disregard
4) Push the new YouTube.apk into your system folder
5) Open YouTube.apk and press menu. Go to settings. There you will see the option as the screenshot shows below.
# busybox mv /sdcard/YouTube.apk /system/app/YouTube.apk