is Android single task or multitasking and multithreading?
It's not a limitation of Android, but a "feature" of the Youtube app to conserver resources. 

If you want to use Youtube as a music player, I think you should be able to find an application that allows you to do exactly that in the market.

TubeMate lets you listen to only the audio of a Youtube file (you have to download it in advance, though), and that should work in the background.