Perhaps Google is just the one to be able to solve copyright issues and work with the copyright holders. It's just as possible that Hollywood and their lawyers will see Google and their billions of capital as an irresitable temptation to sue.
According to the newswire:
When the acquisition is complete, YouTube will retain its distinct brand identity, strengthening and complementing Google’s own fast-growing video business. YouTube will continue to be based in San Bruno, CA, and all YouTube employees will remain with the company. With Google’s technology, advertiser relationships and global reach, YouTube will continue to build on its success as one of the world's most popular services for video entertainment.
This is definitely the tech deal of the year. I would argue that $1.65 billion is a bargain compared to the ~$3 billion eBay paid for Skype.