I think I have it figured out. It has something to do with the comments. I downloaded an extension... I'm not saying which one. but it is designed to 'streamline' youtube and it only works in chrome.
Once I disabled comments--everything buffers MUCH more smoothly and HD videos use the full speed of my connection. It has worked on two computers in my house, and once I enable comments in this extension--the issue comes back. I'm not saying which addon it is, but it is pretty obvious if you do a search for youtube chrome extension.