The HD button, much like time, race, gender, and beauty, is an arbitrary construct. That's not to say it was never a good idea -- but it's something that became prevalent early in the days of web video and eventually became convention despite not necessarily being the best way to do things. Web video really got started on YouTube, and early gripes were mainly about the 240p quality of the videos hosted. Vimeo stepped in, with their main selling point being higher quality than the competition via providing an HD button to click for higher resolution video. This works fine for higher connections, but causes problems for a lot of users.
That's why our philosophy is to provide the best experience at all times and not have to think about it. Most embeds on pages are less than 640 pixels wide. HD encodes are 1280 x 720 or greater. When an HD encode is viewed inline, it's using three times the bandwidth as the computer downloads the HD stream, leading to choppiness and other negative effects (and there are starving children who could eat that bandwidth!).
That's why we created our new Auto HD feature. When you're watching a video inline in our player, it will display at the best perceivable quality, measuring how fast you're downloading; when you fullscreen the video, if your bandwidth can handle it, it will switch to an HD encode where it matters.
Video on your website should be all about user experience and your message. If the viewer doesn't get the message, then the quality of the video doesn't matter -- they won't hear what you're saying and you've lost a potential conversion (particularly important for business video).
Basically, we can view the problem on two axes: one ranging from SD (standard definition) to HD (high definition) video, and the other ranging from inadequate bandwidth to adequate bandwidth. For the SD group, the button is just clutter. This applies to more than just people viewing a video without adequate bandwidth for HD: it can also mean people viewing the video as a smaller inline embed or people who aren't really watching the video for image so much as they're watching it for message. Then, there are those who hit the button but don't have adequate bandwidth to support HD video. For them, it can ruin the experience -- like a mouse expecting a treat and instead receiving a slowly buffered, annoying electric shock.
Based on what we've measured, over 1/3 of viewers still don't have the bandwidth to support HD. The first image that this may conjure is one of slackjawed hillbillies jamming out to the chiptune beats of their dial-up modems, but they're not the only ones. Some other examples -- a few of many -- include: an office sharing a cable modem, users sharing a connection in a café, places where IT throttles traffic, or DSL connections that can't support the bandwidth. For people who can't load video smoothly, the viewing experience is awful and the message is lost.
We <3 HD video in the right time and place, but that time and place is limited. With Auto HD, we think about deliverability for you so you can focus on making your video amazing.