I think they need to first upgrade their video player to allow for HD content and changing video resolution (240p, 720p, 1080p and so on). Next I'd like to see the structure of advertising much like that of Google (forgive me as I don't know the exact term) when paying to get your ad on the side bar or featured result. With that, you pay a flat amount, say $1000, but then bid on how much of that you want to pay per click (.02, .04, 1.0). How much you pay then puts you in an order based on the highest to lowest bidder - highest bidder gets to be on the first page, first in line until $1000 runs out (my wife did this with her business). So, if advertisements move in this direction we will really see a capitalistic marketplace open up in the video sharing community. Also, I'd like to see channels develop for like content, this can be done in the form of user pages that people can follow (like they are setting up now) or individual channels -ie sports, animals, home and garden, financial, recreation, etc. to really organize the videos and open them up more professional content.
In this advertisement idea, I woudl think that the ones that pay higher per view can be automatically associated with the video with the most views/highest rating. Why pay a premium with a video that isn't getting a lot of play, consequently, pay a good price for the video that is getting hit all the time. its a win-win, user gets more $$, advertisement gets more airplay
I think the development of smartphone apps will certainly surge this site into mainstream so that users can record and upload instantly in their hands. I probably have more thoughts but need to organize them while I pretend to do more work