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I've been browsing the web and can't find a way to make the video look just as good as the one listed on the url. GOG's copy is very blurred and extremely blocky. Any suggestions?
Change dosboxGK2.conf as follows:

output=surface (or overlay, both should work)

I think it looks a way better than before.
Post edited April 24, 2011 by Onkel_Donald
You cannot compare a tiny YouTube video with full-screen of today's big monitors. Click on the full-screen-button on YouTube and the video will be just as pixelated.

And, by the way, while Onkel_Donald is right, I suggest trying output=DirectDraw or output=Direct3D as it usually provides a much smoother gameplay experience.