Sweety, I am not sure what your problem exactly is, I think you can choose the definition for each video manually, of course if there is a HD option at all? Not each video on YT has a HD option.
take this one for example: http://www.youtube.com/watch?v=EXNc_...91RVAAAAAAAAAw
Do you see that gear-like, round icon in the bar? Next to "cc"? Click it and choose your poison.