YouTube is apparently for sale - that is, if someone is willing to pay at least $1.5 billion. Yahoo! is reportedly the front runner (not sure how I feel about this as a shareholder).
Jason Calacanis said on the latest Gillmor Gang that he would quit if AOL bought them. He just feels wrong seeing entrepreneurs get rich off of stolen content and suggested that "70%" of their content is infringing works. I'd like to point out again that while Lazy Sunday may have put them on the map, 86 of their top 100 videos were user generated in July. Mark Cuban, who I don't always agree with but as Jason says is right more often than not, says YouTube is damned.
On the copyright side of things, I don't think there are no issues, but I do think they're going to be fine. Grokster gave us a pretty good test that looks at intention, not strictly whether someone profits from a third party’s infringing use. The test considers things such as their encouragement of infringing use, how the service is marketed, and so on. The DMCA provides a nice shield as a service provider, and their compliance on takedown notices goes a long way towards showing good faith.
They've also made good faith steps as demonstrated by the agreement signed with Warner Music. Skeptic is a bit, well, skeptical, though I think he's sort of missing the point. This agreement allows YouTube to post interviews and videos by Warner's artists and also covers the use of the music in the user-generated content. Yes, it's another cash sink, but I don't think we should overlook the importance of this agreement. As Denise puts it, licensing beats litigation any day.