This experience has a few defining attributes, including user-uploaded content, a search-based interface, a wide variety of short video clips, and most importantly, an embedded, fast-loading flash-based player which caches content locally but begins playing it instantly.
Speed matters. One of the many reasons Windows Media Player and RealPlayer-based video services never became as popular as YouTube – aside from the comparative dearth of varied, user-generated content – was because the experience of viewing videos on those services was too spasmodic. Not only would each video take many seconds to start playing, but they would generally stall several times while playing – as opposed to the smoother playback on YouTube. This wasn't accomplished by magic, since it's clear that the bit rate of YouTube videos is clearly lower than that of many other services. But it turns out that providing an experience as close as possible to flipping channels is particularly well-suited to navigating short clips of user-generated content – which often are not very high quality to begin with.
Of course, it was ultimately the user-generated content which was the most instrumental in building a community. The fact that uploading clips was extremely easy allowed YouTube to quickly become the biggest video site on the web. Its repository became a superset of others – and thus it became the first place everyone would go to search for a given video. This was the network effect. In addition, the nature of the content was essentially an extension of the reality TV trend we've been seeing over the past several years.
There have been many folks who compared YouTube to America's Funniest Home Videos, and of course many videos fall into that category. But what's even more interesting are the videos specifically made by YouTube users for dissemination through YouTube. So it's not just about people watching people – it's people watching people who want to be watched online. And they haven't seemed to have gotten tired of it yet.
Overall, it's been fascinating to watch YouTube become part of our culture in the last year, and I look forward to seeing how they'll continue to grow and evolve as part of Google.