YouTube has finally allowed its videos to be cached in the browser’s Temporary Internet Files/Cache. Although this has been possible all along for Flash movies, but YouTube had disabled caching probably due to copyright issues. Now that it’s enabled, you can buffer a video, and refresh the page and watch it again. You can even close the browser window and open it later again to view the buffered video.
You may have to increase the cache size of your browser to take full advantage of this functionality since some videos are larger than the default cache size, specially HQ (High Quality) and HD (High Definition) ones.
This also works for YouTube videos embedded in other websites and not just on the YouTube website only.