Out of all the reports, the thing that most strikes me is how much Google believes video is the future of the Internet. As Paul Kedrosky put it in his excellent wrapup of the news:
"Google is very, very bullish about online video. It was more than spin, with the conviction coming through loud and clear."
PaidContent.org also quotes Google CEO Eric Schmidt: “This is the next step in the evolution of the internet. It (video’s) a natural next step.”
The YouTube brand will continue, probably with the addition of Google Adsense at some point.
There is a LOT of talk about the deal, but for me it's significant as a watershed moment for the Web and online video. If Google is willing to spend $1.65B on the leading online video company, then they must believe that for both YouTube and the online video industry as a whole - there is a lot more growth to come.
YouTube is in many ways the MTV of the current generation. What's more, it has a user experience better than any other online video site OR tv channel. Check out Compete's recent analysis of YouTube compared to Google's own video site for some clear reasons why:
"More people visit YouTube, they come back to the site more often, and spend more time on the site each time they visit. That is a certifiable triple whammy and a knockout punch rolled into one."
Enough talk, it'll be interesting to watch what Google does with YouTube now - beyond putting its ads on it.