The thing that has me most confused about the whole You Tube thing is that Google already had a video service. Here is the site. You can find it form their homepage. Why would Google purchase another video service?
The only reason i can think of is that, there must be a video that can bring Google to its knees on You Tube and Google wanted it.
Unlike Les, i don't feel this purchase is odd. It is either genius (because I don't understand it) or Google just made a 1.65 billion mistake.