Google has brought us some considerably insight as to their future plans of their most recent acquisition, YouTube. The video-sharing site has seen amazing success as well as harsh criticism from many in the industry, largely due to piracy. They plan to bring many nifty things to YouTube, such as incorporating Google's video searching into the system, and ultimately transforming it into a worldwide video search repository, much as is Google's primary strength. They make it quite clear, however, that YouTube is still going to be left largely to its own devices:

YouTube, as we've stated previously, will remain an independent subsidiary of Google, and will continue to operate separately. Google will support YouTube by providing access to search and monetization platforms and, when/where YouTube launches internationally, to international resources. YouTube co-founders Chad Hurley and Steve Chen and the rest of the YouTube team will continue to innovate exciting new ways for people to "broadcast themselves."
No comment appeared on the issue of copyright violations or of potential deals with 3rd parties. It's clear, though, that they do have a plan for the company as a whole, and the fears of it being replaced by Google Video are likely unfounded.