hello, youtube offers its videos in differently encoded formats - there's the traditional flash videos (flv, available at 240p) & the newer ones encoded in webm or h.264 (those seem to have at least 360p).

firefox has built-in support for playing webm-encoded videos - youtube detects that and will serve you the webm version of the video instead of the flash version, which has the result that you cannot switch to a lower resolution. unfortunately the only way around that is to disable webm support in firefox, i think... you can do that by entering "about:config" into the adress bar of firefox, confirming the info dialogue, and setting the "media.webm.enabled" prference to false (by double-clicking it)