Edit: or not. Seems youtube is not happy with the app and blocks playback randomly with 403 errors.
Also, the app seems to insert undismissable fullscreen ads every few minutes, without even having the courtesy to stop the video when doing so. But at least background play definitly works, I guess...
(Undismissable in the sense that it tries to block me from going to the homescreen if I didn't click the ad - not even talking about going back to the video player or other parts of the app)