While involving a few steps, it is very simple to put YouTube videos on your Zune. First, you will need a couple of utilities to accomplish this. You will need one utility to download the video off of YouTube (the FLV file) and another to convert the file to a Zune compatible video.
I used TubeSucker (http://www.newrad.com/software/tubesucker/TubeSucker.msi ) to download the YouTube video and SUPER (http://www.erightsoft.com/S6Kg1.html ) to convert the file [both are freeware applications]. After installing the two applications, go to YouTube and find the YouTube video(s) you want on your Zune. Copy the url for the video, it should look like
http://www.youtube.com/watch?v=t8KfdYgE1Uc.
After copying the URL, open up TubeSucker and go to the Batch Download Multiple URLs tab. Past the URL and click the Download URLs button. You can add multiple URLs or just one. These will download to the My Videos directory under My Documents. You can also search YouTube for videos using the TubeSucker Search feature.
After you have grabbed the FLV files for your video(s), open SUPER and select the Output Container to be mp4 (MPEG-4). Keep the default settings, however make sure that Use Direct Show is unchecked. Now drag and drop your new FLV file into the lower portion of the application. Check the corresponding checkbox next to the file and click the Encode button. The files will be encoded to Output directory in SUPER’s installation directory
(C:\Program Files\eRightSoft\SUPER\OutPut).
Open the Zune software and add the SUPER Output directory to the list of folders to be monitored by the library. Connect your Zune, select the video(s) to be put on your Zune and sync as usual. Presto, YouTube video on your Zune.
OTHER METHOD
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1.Go to the video you want and copy the URL
2.Go to http://www.zamzar.com/url/
3.It will say: Step One:Select files or URL to convert
4.Paste the URL into the first box
5.Follow the on-screen instructions
6.When it asks you what you would like to convert it to, select .MP4 . Make Sure to either make it a.MP4 File or a .WMV file or it wont work
7.You Should Recive An e-mail in about 5 minutes Click the link and download the video . The e-mail may take more or less time to come depending on how big it is and how many people on using the site.
8.Open Zune Software an select Options>open file>The name of the file. It will automaticly add to your library.
Other methods of putting youtube videos on the zune are listed here-
http://blogs.tech-recipes.com/shamanstears/2007/06/27/how-to-put-a-youtube-video-on-your-zune-method-2/
http://www.soft29.com/how-to/youtube_to_zune.htm
Hope that helps