Well, most of the frame dropping issue is due to streaming at a quality level you don't have the bandwidth to support.
Often this happens when your initial bandwidth measures much higher than your sustained bandwidth.
Comcast is famous for this - they give you a huge burst in speed, way over what you pay for, but its only for the first part of the download. Then it drops back to something approximating what you pay for. This fools bandwidth sensitive apps into sending you a feed that your service can't support.
You can see if this is your problem by pressing the pause button on the youtube player, and waiting till the download bar fills all the way, then pressing play again. It should be smooth.
I can't say much about netflix because I don't use it.
Netflix and You Tube stream fine on my Laptop and Roku box (wireless) so I know that's not it. I would suspect maybe a background program that is using cpu cycles or something like that.
