The first important addition is the support for authentication, which now allows users to upload videos, edit metadata, post comments, rate videos from other sites or from desktop applications. That means someone could create a better interface for YouTube and leverage the existing users and their data.
Another useful API lets you control an embedded YouTube player using JavaScript or ActionScript. As this example shows, you can pause a video, skip to a certain frame, change the volume using some simple code. YouTube no longer restricts you to use their player: the chromeless player lets you add personalized controls, menus, but you can't remove the branding.
YouTube mentions that the API's intent is for non-commercial use, but you can utilize it to "show YouTube content on an ad-enabled blog or website that is not comprised solely or substantially of YouTube video content". Read the terms of service for more details.
