You can now simply set your preferred video resolution in TVlc Preferences. The following paragraph only applies if you let Vlc resolve your video urls which is no longer default. If your bandwidth is too low for some HD-Videos (1920x1080) you can force Vlc to always use a lower quality that fits your needs. Simply make a small script to start vlc with the argument --preferred-resolution, e.g.:
vlc --extraintf=http --preferred-resolution=360
Replace 360 with whatever maximum vertical resolution your bandwidth can handle. Youtube videos normally are available in some of the following resolutions (240, 360, 480, 720, 960, 1080) If you do not specify a preferred resolution or the video is not available in your desired resolution, the highest available resolution will be used.