It sounds like your download speed allowance is too slow or there are too many others trying to download off the same bandwidth at the same time i.e. the contention ratio is too large. You could check your speed at www.speedtest.net. Remember at peak times you will have reduced download speeds. For example, according to speedtest I can now download at 1203 kb/s. This is fine for streaming videos from youtube etc., but less than 750 kb/s and I sometimes encounter the same problem as that in your OP.
That's what I normally do too. Start it playing then pause until it downloads/buffers the lot and then restart for a smooth play. I get the buffering problem even on very high speed links so presumably at least some of the delay is at the YouTube server end?