Hi! I'm the creator of Headset. Was surprised to find out (a day later) that my project was already posted on HN! To address points "8/9/14 section II - Prohibitions" in the link above: There isn't any modification nor separation of the audiovisual components. The embedded player is always available to the user, it is not hidden or covered by any frame or element on the page. The size of the player is above the minimum dimensions (200x200) and users can interact with the player the same way they interact with it on youtube.com. I'm not providing any option for the user to hide the player, except minimizing the window, which is an action that no policy can restrict. On the other hand, I truly understand your concern. Google has the ability to change the policy at any time.
I won :)