According to a small change in their terms and conditions, if you upload a video to their site, you're giving them the right to re-use that content any way they please, and they won't owe you a thing. Here's the new text that's causing all the fuss:
"…by submitting the User Submissions to YouTube, you hereby grant YouTube a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the User Submissions in connection with the YouTube Website and YouTube's (and its successor's) business… in any media formats and through any media channels."The story got major play in BoingBoing (including a response from YouTube's marketing people.) John Battelle has a story on it here. And Wired Music has something on it as well.
But while some are warning people not to post any of their content to YouTube, others say it's more a case of bad timing, rather than malicious intent.
One aspect to this debate is that there is a solution out there already, and it's the Creative Commons copyright license. So far, it's only been getting limited attention, but I think it's the perfect answer for how to deal with these copyright questions. And sooner or later, someone is going to take it more seriously. Open Source rules.
In the meantime, it will be interesting to see whether the bloom fades from the YouTube rose, and whether another video hosting site becomes the "next big thing."