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David Berlind wonders whether or not this means that we'll see more YouTube's on the Net. 75% of the video online is currently served in Flash format, so there's not much more room to grow there, but with H.264 support and a huge price drop, it might be possible.
The biggest feature of the new release is probably support for h.264. That's the same format used by Apple for their QuickTime videos and for BluRay DVDs. I think the biggest change in 2008 will be the death of proprietary video codecs. With Flash Media Server and Flash Player supporting h.264 video there's no reason to use anything else. Its a move towards a more open, standards based digital world, and I expect most online video will be using it by the end of 2008.