Laws of Fair Use only prohibit the use of copyrighted material for personal gain in any way, shape, or form.
As far as I know, any person on Youtube who is NOT a Youtube Partner (Being paid by Youtube per video per watch) can use any music or footage they wish to insofar as it is not an advertisement for a personal service/product or otherwise meant to accrue monetary gain. The only reason such a fit is being thrown is because the music industry is failing (Not because of illegal file sharing, but because of an utter lack of talent and literally no incentive to purchase rather than download for free).
The fact the Music Industry tends to make scapegoats of old ladies and little girls only encourages further illegal distribution (Who wouldn't want to harm a corporation that backhands old women and beats little girls, figuratively speaking?).
Basically, the only thing the Music Industry has is a sty to stew in when their ill-gotten gains are swept from under their fattened bellies and the artists decide to self publish and set their own bar (When the big record labels make at least ten to one what the artists make, you know it's a failure of an industry in every way).
Actually not so much since a full song posted without any form of dubbing over (Karaoke, commentary, etc) can be ripped from the video if you know what you're doing since the entire video can be downloaded pretty easily. It's all in mp4 format and the audio is in AAC so it's pretty easy to discard the H264 stream and remux to an m4a file (which is the same as the iTunes format) and you have the song you want that can be played back in your music player or mp3 player (that supports AAC format of course). This is the reasoning why most videos like AMVs or video game music videos get shot down or disallowed in several nations. Probably the easiest example of an "exempt" video from this punishment was that one where a 10 year old girl did a piano cover of Lady Gaga's song "Born this Way" (which was allowed and cheered by Lady Gaga herself).
Of course the obvious uploading of songs with audio only (and using a picture of the album it appears on) take more priority in being taken down unless it's uploaded by the copyright holder directly. VEVO is actually fairly generous in uploading metric tons of music videos legally (all which can be easily downloaded) as well as lots of "audio only".
Most people don't realize how strong patents are. Most people are familiar with the LAME encoding engine for MP3 files and the developers of it only release it in source code form because it's illegal to distribute the binaries without a license from the patent holder. Several other people have compiled it and offer it for convienence (some legally, others maybe not) but it does go to show how harsh the copyright laws are. The video posted actually does give a good example of what "fair use" really means.
The music industry isn't fighting a losing battle because of "lack of talent". They're losing customers because of the harsh measures they're willing to go to protect IP rights. Look at Cheat Happens for example. PWizard and Caliber do put in bits of code into every trainer to prevent them from being used outside their own terms of use and there's many users outside the site that don't agree with it. When people do create AMVs and the sort, it really is pretty similar to trainer rippers in that you rip out the core of what it is (the song) and just put another visual interface over it (i.e. the video part). Sure people do put in things such as "Song is not owned by me and is made by [artist goes here]" but I'm pretty sure PWizard would still be just as mad and probably even more ****ed if someone openly admited "hey this is actually CHU's trainer coding but the awesome GUI is by me".
Not saying that people that upload AMVs and whatnot are bad because there's a huge difference between wilfully infringing copyright and negligent infringement (one is intentionally such as torrenting an album over bit-torrent while the other is accidental and unintended). The majority of those people simply don't know that it's technically against the rules and sometimes they do luck out when the copyright holder doesn't care about it. So many people don't actually go look it up and go by word of mouth of what fair-use is leading to lots and lots of negligent type of copyright infringement (hence why even though the punishment can and sometimes is harsh, but the far more common one is simply having your YouTube account banned and that's it).
[Edited by moderator Neo7, 7/2/2011 8:37:38 PM]