I wonder how mashup videos are handled, in case a single video uses material (audio or video) from two content-providers. As I see it, it seems that the system only tags a video to be the property of only one content provider.

hmmm...great news!!! i guess this is the way to go...if this works well, it looks like media companies will finally meet the 21st century :)

Eugene, and then there's the issue of fair use – I'm not sure how smart Google/ YouTube's identifier is in understanding that a small clip from someone else, integrated as part of a larger something, can be perfectly valid (and can also be used commercially by the masher without paying the quoted-clip owner).

Philipp, that too. I pretty much am willing to bet that their auto-tagging is likely to trample down on fair use. Fair use (in the U.S.) is definitely something that can't be determined in an automated manner since each case of fair use can only be determined by the court system. And I don't think robots will become judges/jury anytime soon.