Yes it can play HTML5, get Firefox.

We will not see Flash Player 10.1, 10.2, or even the current 10.3 on there unless you install Android, or it gets included with Meego DE one day.

may be youku has upgraded to flash 10 or what not .but N900 does play videos from tudou.com ,so you may divert yourself to that site .
html5 videos could be played with firefox but due to plugins problem,still with no luck ,just hope for a flash update from somewhere or plugins for firefox and opera .hope things get right soon .