There are two main steps if you want to download, save, convert and play YouTube videos on your computer.

First, go to YouTube Downloader, and copy and paste the video URL on the Video URL field. Press Enter. The output will be the Download URL or link of the video, now in FLV or flash video format. Download this flash video to your computer.

Footnote: You can actually play this flash video by downloading either the VLC Media player or the K-Lite Mega Codec Pack 1.65 (alternatively there's the XP Codec Pack 2.0.6 , but I haven't tried this codec pack) and installing it on your computer. Both codec packs come with the Windows Media Player Classic edition, which you can use to play the FLV video. (I actually have the Windows Media Player 11 version and sometimes some of the video formats can now play in this version if you install the codec pack, but in my case, the flash video wouldn't play in WMP11. End of footnote.

After you have downloaded the flash video, you can now convert it to any of the following formats -- iPOD, PSP and Mobile Phone Formats (all MPEG-4 or mp4) -- by downloading Free YouTube to iPod Converter and converting the flash video with this program.

Alternatively to the aforementioned steps, just enter the URL or link of the YouTube video you want to download and enter it in Input File field of the Free YouTube to iPod Converter, and the program will automatically download and convert the YouTube video to your desired settings, although I found this process to be slower than the two-step conversion.