YouTube is working on its own online television service called Unplugged. Its a war with traditional cable companies.
No,YouTube can not Replace Cable TV.
Youtube is very handy and accessible in cellphones also..Good to watch television on mobile also :-)
Though Youtube is doing a great job but the drawback seems to be that the online television will work only if the user has an internet connection. If there is problem in the intrenet connection on the user's side then this kind of service will not be worth compared to the traditional cable companies...