One of two things will happen, of course.
Google will crack down on copyrighted material, making it hard to post videos, and thus decreasing the quality of Youtube videos, the appeal of youtube is that it's so easy to post a video, so you get a wide array of all kinds of crazy shiz.
Google doesn't crack down and gets sued, the suits probably wouldnt be too bad as long as they actively look for and block infringing files, but im not a copyright expert. More likely is that the blow to google's image (its "do no evil" motto) would outweigh the legal costs, google just wouldnt be the same innocent google if its constantly involved in copyright infringment legal battles.
Just the way I see things.
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