The new Youtube for Android update seems to break the app. A lot of people in the comments/reviews for the app are saying that it the audio cuts out half way through a video. Others are reporting it is very slow and takes a while to even load up fully.
I'd wait till Google looked into this properly and fixed this before updating. However others are saying that it is working fine for them after a reboot. But to be on the safe side I wouldn't update just yet.