After looking over this video several times, I'm starting to think that the problem lies with the fact that the footage was originally shot in a small, SD (720×480) size and when played back in full screen on a monitor with a much higher resolution (1440×1080 or more), it tends to look both fuzzy, and full of artifacts, especially when uploaded to YouTube. This may also be the same reason why it looks so good on your camcorder's smallish monitor and not on your computer.
Here's what I would do to test this theory: If you could, watch the original digitized footage from your GL2 at it's original resolution on your computer. This may play back the video in a very small window compared to your screen size, but it is the best way to tell if the problem lies with the video capture or with the upscaling that your computer is doing when displaying your footage at more than 100% of it's original size. I'd be curious to know what you find out.
Also, for all of the other responders, I'm also curious to know if you're seeing the same compression artifacts and graininess when the video is played at the original frame size on your computers in YouTube. Let's see if we can't solve this problem for Eric!