I've been on Netflix for about 6 months now, and I'm flabbergasted at the quality of their recommendation engine (which maybe owes much to their Netflix Challenge -- I don't know how efficient it was before).
For every show listed, they predict how much I will like it, and their prediction is almost always right.
On the other hand, Amazon is almost always wrong, and so is Youtube; my guess is Amazon bases its recommendations on what I buy instead of what I like, and Youtube does the same (what I watch instead of what I actually like).
A recommendation engine for Youtube (or all video sites) that would actually work would have a lot of value for users.
There's a chicken-and-egg problem: how do you get enough ratings to be able to make recommendations; this can be addressed by starting in a small niche of specific content: start with a small community of people passionate about a subject.
My two cents.