Considering the updated information in my previous post, I'd say they're using the Flash plugin itself. Or maybe I've got this all wrong and it's the JavaScript that's fetching the data and Flash that's only used to display it. But then ad blocking may be oriented toward blocking the display phase and not the download phase, because it's generally more reliable to prevent something from being rendered than it is to keep up with continuous changes that might be made easily to the JavaScript that fetches the data.
I don't know, I'm just speculating. What's important is that I now have reason to think everything will be fine in Otter if it supports the Chrome-compatible version of AdBlock [Plus] and the manual replacement of its Flash plugin with the newer "Pepper" Flash plugin.
The fact that the same people who make the AdBlock Plus extension work fine in Firefox and Opera Presto can't make it work reliably on Chromium-based browsers tells me the problem is a bit more complicated than identifying and blocking some URLs.
LE: Apparently the Chrome-compatible version of AdBlock Plus can block in-video ads just fine, but only in browsers using the newer "Pepper" Flash plugin developed by Google in collaboration with Adobe and available exclusively in Chrome installations (or as a separate install for Linux via this workaround). The problem with the "Pepper" Flash plugin is that it's still very buggy, e.g. the current version insta-crashes every time I try to watch any twitch.tv stream (though it works fine with YouTube and allows AdBlock Plus to block all ads like it's supposed to). So it would seem that if Otter provides support for Chrome-compatible extensions in the future and if Google fixes its "Pepper" Flash plugin, it will be possible to have proper video ad blocking in Otter just like in Opera Presto.
@donjoe, content blocking will be built-in and should come much sooner than extensions (hopefully in time for first beta).
There's only so much one could do with the built-in content blocking, I see it more as a nice-to-have compared to ad blocking extensions. I don't remember ever being able to block in-video ads with it, so I don't consider it a solution for YouTube. The only solution I know for YouTube is AdBlock Plus, and that one only works for me on Opera Presto and Firefox so far.
LE: OK, just tested it in Opera v12.16: you can definitely not clean up YouTube using the built-in content blocking functionality - it just hides the whole video player if you try, it can't detect pre-roll video ads, nor can it detect overlaid banners that sometimes show over the video.
Might be worth mentioning on http://alternativeto.net as well when it's ready for more publicity.
One big question for me: is Otter planned to support only Chrome-compatible extensions and thus to be unable to block YouTube ads even with AdBlock [Plus] installed? That would be sad, as Opera Presto v12.16 is still perfectly capable of giving me a 100% clean YouTube experience.
I also consider Maxthon (now at v0.9.2.1 for the Linux beta) a candidate for an Opera replacement because its Windows version has pretty much all of the major features I knew and loved from Opera Presto: highly configurable Speed Dial page, mouse "rocker" gestures for Forward and Back actions, popup blocking, ad blocking, general form autofill (not just passwords), configurable default page zoom (other than 100%) etc.
The first major disappointment with Maxthon, however, which tells me I'm never going to use it as my only browser, is that due to the fact that it's based on Chromium it shares Chrome's lack of support for whatever the AdBlock and AdBlock Plus extensions need in order to block in-video ads, including YouTube ads. This is a major disappointment because with Opera Presto I had gotten used to never ever seeing YouTube ads after installing AdBlock Plus. And I'm afraid Otter will have the same deficiency since it too is based on WebKit.
What's important is that I now have reason to think everything will be fine in Otter if it supports the Chrome-compatible version of AdBlock [Plus] and the manual replacement of its Flash plugin with the newer "Pepper" Flash plugin.