The videos I've saved work for me when I browse Instafilm on my iPad. It may depend on your specific video - if I remember correctly, some YouTube videos are unable to support HTML5.
Not talking about an iPad; I used Firefox 4. I confirmed that the particular video supported WebM on YouTube. However, I just tried again with some other videos, and it worked this time. Perhaps YouTube just randomly decided that that video shouldn't work for a while. shrug