Consumer electronics companies like Apple, TiVo and HP either are or will be putting YouTube content on your TV through set-top boxes. But Panasonic’s new PZ-850 plasma Viera TV ditches the box and puts YouTube directly into your TV, and I got to see a demo of it today.

The PZ-850 sports an Internet connection and a dedicated on-screen YouTube section that gives you access to the site’s entire video library. Though the interface is different (built for remote control browsing), it offers pretty much all of the same functionality as the YouTube web site — search for video using keywords, check out the most viewed, rate videos and access your account.

The video quality isn’t bad. All the YouTube content is encoded in H.264, but the experience hinges on how good the original file was. As more people adopt HD camcorders, the average video quality will improve. There is a full-screen version, and it was watchable, but the smaller size was a far better experience.

Though they wouldn’t spill the beans on any other video partnerships, a Panasonic rep said they were on the way, so it’s not too hard to imagine Netflix or Amazon streaming content directly to the TV.

This week we also covered an independent player in the space — though it does require an additional box — the Verismo PoD.