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What high quality codec can I encode into such that all common browsers will be able to view HTML5 video right now?

Also, YouTube doesn't default to HTML5 video for browsers that support Flash. Why is this?

Do you really think the various browser vendors are going to implement the new HTML5 features identically? Its already a mess. The real advantage of HTML5 is that it will allow vendor lock-in to take place.

I'm not a tech zealot, one way or the other, but Flash is going to be here for awhile regardless of your hopes. In the meantime I'd expect improvements in its overall usability on touch based hardware.