I assume your problems are the same whether you let the video buffer or not.
If I'm correct...
Adobe Flash is a popular web browser plugin, and it's probably what's playing the online videos you refer to. Flash's video decoding is inefficient, so slow Atom CPUs have difficulty playing videos in Flash. But the same videos can be played easily with a better player.
If possible, download the videos and play them in a separate player. There are Firefox addons that can download videos from many sites, and, in Linux at least, the Flash plugin frequently downloads videos to temporary files by itself. I just pause the video, and play the temp. file in mplayer or VLC. "mplayer /tmp/Flash*" while the video is paused works for me.
Insufficient RAM is almost never a problem with video decoding. Video decoding hardware in a better graphics "card" could help, but upgrading is impossible on a netbook and most laptops.
To summarize, I think your problem is a CPU that's too slow to perform well with poorly written software. And since a better CPU isn't really an option, better software is your best hope.