Found following workaround for non working fullscreen feature on youtube:
1. On a youtube video click the "Pop out" button.
2. With the popout window being given focus, switch opera to fullscreen mode, e.g. with Alt+V->U.
This works for me with following setup:
TC 2.10, jwm-snapshot, opera-9.64.gcc4-static-qt3.i386, latest version 9 libflashplayer.so
With flashplayer 10 straight fullscreen per se works fine on some sites (incl. youtube), messes up with some others; trying flashplayer 7 patched to version 10 did not work for me at all.