I believe the encoder scripts that run on a desktop produce videos of higher quality but the format generated isn't something you can get from youtube. If you download a higher quality video from youtube it will usually have playback issues.

Just setup a little server script on your desktop, have your tablet send a request to it to download a highest quality youtube video, encode for your tablet, scp it over and then send your tablet an email notification. Switch your desktop to Linux and I'll write it for you.