Okay, I got a new computer, better, so now the Mercury Playback engine works with the T2i footage, not perfects but 3x better. So the t2i footage is 1920 by 1080. I make the Premiere Sequence the same dimensions. I export in H.246 with the Youtube Widescreen preset at 1080 by 720.
Then I upload to Youtube, and it isn't in 1080, it only goes to 720, and it isnt full screen, there are still black bars on the side. Here is a test video. http://www.youtube.com/watch?v=PB4CmTL1xss This video is kind of dumb, but It proves the point.
If you export at 720 that is what you get in YouTube.
Just set the preset to 1920x1080 by raising the level to 4.2.
This little video I made for another forum user explains exactly what you need to know to output an H.264 MP4 file in full 1080P that will look fabulous on youtube: http://screenr.com/e2Hs
You are choosing the wrong preset in Export Settings. Choosing the YouTube HD Widescreen will only give you 720p. Choose the HDTV 1080p preset under the H.264 format and the framerate that matches the sequence that you're exporting.
Thanks Stan for explaining this really well with your video!!!