I am not talking about merely hiding the bar by clicking on the ‘double bar’. But a complete removal. Yet Google does not offer such option.
To be more clear, this is the thing I refer to:
Fortunately, some volunteers have created a greasemonkey fix for firefox that can kill off the freaking annoyance once and for all.
Here is the greasemonkey fix for firefox from the official page: access here
Or download a local copy here (last updated 25 August 2011): remove youtube playlist bar
The author seems to update the script regularly. My kudos to him.