This add-on is a lightweight add-on that tells YouTube to load the video in HD straight away. Unlike other add-ons like it, YouTube HD causes no stall in the loading, no refresh of the page and does not manipulate the video object.
Here is a little more about the add-on from the developers:
The addition to the URL is a convention set by YouTube, so you can expect as much of a speedy experience as YouTube offers, but without having to select “HD” manually every time. It simply adds “&hd=1” to a YouTube URL.
Want to learn more? You can pick up YouTube HD from the Firefox Add-ons website.