Well, that's interesting.
I have to say that I agree with Mark Cuban's take on the whole thing. Short version being that it's a legal house of cards that will start to crumple following the first copyright lawsuit (and the wave of follow-ons).
Still, Google and their what-must-be-a-now-legion team of lawyers thought it was still a good idea, so what do I know.
There's another story here, which in the dinof all the copyright issues, LonelyGirl15's and cat videos, doesn't get talked about. It's a disruptive technology discussion.
It's interesting that while Microsoft's WMV, Apple's Quicktime, and MPEGs (2,4, etc) were all fighting it out, they all turned around to realize that - in terms of eyeballs anyway - Flash had passed them all by. Interesting.