clevername let us know that the app offered an option to download videos to your device, and it has also been confirmed that the new app strips out the ads from YouTube videos. Both of these may be features that users enjoy, but both are also explicitly in violation of the YouTube terms of service. Section II of the ToS states:PhoneArena user
Microsoft has admitted that it had to "re-architect" the YouTube API in order to make the app work. Google has yet to comment on the situation, but it seems that the two companies may not be as good as we first thought when we saw the app update released. Google usually doesn't take too well to apps messing with ads, not only for its own revenue, but because YouTube content creators often rely on that ad revenue.