DieRuhe: "You affirm, represent, and warrant that you own or have the necessary licenses, rights, consents, and permissions to publish Content you submit."
From the terms of service.
edit: also, "You further agree that Content you submit to the Service will not contain third party copyrighted material, or material that is subject to other third party proprietary rights, unless you have permission from the rightful owner of the material or you are otherwise legally entitled to post the material and to grant YouTube all of the license rights granted herein."
KneeTheCap: So basically let's plays, reviews, trailers and stuff like that is illegal, then. Wonderful.
That's my take. But there's so much there, and I think it comes down to whether or not the legal owners want to do anything about it, not Youtube itself.
edit:
"In August 2008 US District Judge Jeremy Fogel of San Jose, California ruled that copyright holders cannot order a deletion of an online file without determining whether that posting reflected "fair use" of the copyrighted material.
The case involved Stephanie Lenz, a writer and editor from Gallitzin, Pennsylvania, who made a home video of her thirteen-month-old son dancing to Prince's song Let's Go Crazy and posted the video on YouTube. Four months later, Universal Music, the owner of the copyright to the song, ordered YouTube to remove the video enforcing the Digital Millennium Copyright Act.
Lenz notified YouTube immediately that her video was within the scope of fair use, and demanded that it be restored. YouTube complied after six weeks, not two weeks as required by the Digital Millennium Copyright Act. Lenz then sued Universal Music in California for her legal costs, claiming the music company had acted in bad faith by ordering removal of a video that represented fair-use of the song. For more information, see Lenz v. Universal Music Corp."
Ok, I'm not an expert on fair use, but from what I've been reading, that may be the "loophole."