Since May 2015 the official Youtube client for Live/Plus devices no longer works. This is because Youtube officially discontinued their APIv2 which the official code used. Firmwares based on 1.02 or 1.05 can no longer use the built-in Youtube/YoutubeHD client. Firmwares based on 1.06 use YoutubeLeanback, which still works, but is slow and causes the box to crash after a few videos are played, so you can consider this as an alternative.
So, long story short - you can use this UMSP plugin to play and search Youtube content: http://forum.wdlxtv.com/viewtopic.php?f=53&t=9230
For any problems, please discuss on that thread.