I just switched back to noveau and on a whim, tried disabling hardware
acceleration from flash player's settings (Right click -> Settings...)
and lo and behold, fullscreen playback is now smooth again.

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Youtube videos jitter in full-screen mode [worked with Ubuntu 9.10]
https://bugs.launchpad.net/bugs/569976
You received this bug notification because you are a member of Ubuntu-X,
which is subscribed to xserver-xorg-video-nouveau in ubuntu.

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