I had the same problem and uninstalled Adobe Flash (using their uninstaller), installed the latest version 10.0.32.18, and cleared Google Chrome cache and still couldn't view Youtube videos (or MSNBC videos) -- got the same message about either having JavaScript turned off or not having the latest version of Adobe Flash installed

Found the answer - on the Adobe Flash download page there's an option "different operating system or browser".  I used this and installed both the IE version (which didn't solve my Chrome problem) and also the "other browser" version -- which while it doesn't list Chrome as a supported browser, does now work on my computer (Vista O/S).  Videos now work in Chrome.