Ok, I just did some quick tests Running LInux Mint 16 from a flash drive, I opened Youtube in Firefox and played the video for Elysium (available in all resolutions up to 4k). I saw the jittering and "slicing" at 720p and 1080p. Then I went to XBMC and installed the Youtube add-on. I opened the same video and saw no "slicing" at all at 720p and only a little of it at 1080p.
Can you try the same to see what you get?