Some Youtube videos have two HD settings: 720 and 1080, but VLC always chooses the lower, 720 option.
Is there a way I can stream videos at the highest possible resolution?
No, because for resolutions higher than 720 that would require to download two different DASH streams at the same time (one for the video and one for the audio) and to mux them together on the fly.
Flash Player can do that but not VLC, nor any other freeware that I know.
Some tools allow you to download such high resolution videos but not to stream them on the fly.
So we can say that VLC won't be able to play that till now
Why so , I am interested just for knowledge(deep knowledge), since I have rigged to much knowledge about VLC
Well I guess you guys can work over with Youtube Playlist parser if possible (as it was possible way back then)
EDIT: One more thibg is that i have one youtube parser that supports upto 200 videos in a playlist if it is more than that it will not be able to play ... I think you can include it in next beta release (if available in 3.0.15 pre release)
AND YES I ALSO AM NOT ABLE TO PLAY MORE THAN 720p 30fps and sometimes just 360p