I'm not sure what you mean by "hurt". Playing a video back isn't going to bother the iMac one bit. The worst that could happen is that the iMac isn't powerful enough to decode the video and it won't look smooth.
In this case, HD only refers to the fact that the video has a high resolution (1920 x 1080 most likely). If your iMac's screen isn't this big, there's no reason to try playing a YouTube video at 1080p, as your screen has nowhere to put the extra video data (it will take all that data and shrink it to fit your screen, wasting CPU/GPU power).
Unless your iMac is thoroughly filled with dust bunnies, you shouldn't have much of a problem with HD content. Anything from the last four years should easily play HD content, and if you iMac has a MiniDisplayPort on the chassis to allow connecting an external display, you'd find that connecting such a monitor/TV would properly display HD content.
It might not play it smoothly, as Squirrel noted, but it shouldn't damage your system either. HD playback takes less GPU than World of Warcraft, which already is CPU bound.