Get this jQuery Youtube Playlist working?
In Drupal, you can't just call jQuery quite like that. The reason is mostly because there my be other JavaScript libraries in use so jQuery is not aliased as $() in Drupal. For more details on that you can view the Drupal Docs about JavaScript compatibility, or the specific issue in the queue.

The solution is to wrap your jQuery code as described in the Drupal docs page linked to above. In your case it would look something like this...

(function ($) {
  $("ul.demo1").ytplaylist();
})(jQuery);