Here are some ways to download YouTube videos.
Personally, I like the ‘The All-In-One Video Bookmarklet’ which is hassle free and works well. This way, the files are saved in flv format which can be played on VLC player
Video DownloadHelper is also a great Firefox add on which accomplishes the same thing. It shows up neatly across the addressbar and when a video site it can help with shows up, it notifies without being intrusive at all.