Google unbundled the YouTube app from Android, releasing the newest version of the app today, version 2.1. With the app now unbundled, it should mean more frequent updates as it will no long require you to wait to update your Android OS to get the latest version.

The app will only work on Android 2.2 and above and is available now in the Android Market, and will come pre-installed on the Nexus S (the first Android 2.3 phone).

The new app is completely redone “from the ground up” as Google puts it, and has quite a bit of new features including in-page playback that allows you to watch videos on you mobile while browsing related videos, rating videos, and even post comments. YouTube has also simplified how video/channel subscriptions are updated, and subscriptions can now be viewed on the app’s homepage. Also, the new app now offers one other great feature: the ability to make a video full-screen on your phone just by rotating your handset, as well as new on-video controls while in portrait/full-screen mode.