Youtube – 720p videos on YouTube to 240p

Your Internet speed is too low, as you said animated circle, that's indicating you that the video is currently buffering, in another words, it is loading, so whenever you open a video page on YouTube, play it, than immediately pause it, let the video buffer, you'll see a grey line filling, once it's filled, you can play your video without any interruptions.

Firefox add-on SmartVideo for YouTube will do just that. You can even tell it to either start the video when you want. You can just open the link in a new tab, and just come back to it when you're ready to watch the vid. It has other useful options as well.

Edit: SmartVideo can be a bit buggy. As to 720p videos being buffered, I think it's because all videos in 720p (or higher? not sure) are already on WebM format. It's my default setting. It's the fastest video setting to load, faster than a 480p flv file.

Edit2: SmartVideo is also available for Google Chrome: https://chrome.google.com/webstore/detail/smartvideo-for-youtube/lnkdbjbjpnpjeciipoaflmpcddinpjjp?hl=en