@stumped, you are spot on that it can be software controlled, and for this reason Adobe Flash had that option. True, it was sometimes buggy. But with the Catalyst 13.4 with its new OpenCL integration, there is no more such option on the right click menu. Perhaps we'll see it back when Adobe Flash gets updated.
@black_zion, indeed it practically makes no difference except in certain cases of parallel gpu processing, such as when playing a few online videos at the same time, or playing a game with a Youtube video in the background. Besides, hardware video acceleration can make playback somewhat smoother. With Catalyst 13.4 installed, I've no idea if hardware acceleration works at all or not.