Reminds me of Songza, though they are browser based. They prominently display the video now, probably because YouTube was not too pleased.
I think it's pretty awesome that a 15 year old made this and is getting coverage for it, but the website is a way too noisy for me.
sounds like what playlist.com has been doing, quite successfully too, but I don't think they use youtube vids. I was wondering if they would start.