Little update on this - replacing the code you provided ends up *NOT* being able to see the video, at all, on iPad or iPhone. There's just simply nothing there, not even a link.
Reverting to the original code:
Code:
<iframe title="YouTube video player" width="640" height="390" src="//www.youtube.com/embed/{vb:raw code}" frameborder="0" allowfullscreen></iframe>
and adding &fmt=18 to the end of the YouTube URL, manually:
Code:
http://www.youtube.com/watch?v=v_gQHtXsLtU&fmt=18
Does display the YouTube video in-line on the iPad, and allows it to be played within the page.
Clearly, there's still some tweaking that'll be needed for that - too bad this isn't genuinely cut/dry.
Hope this helps, though.