A friend pointed this out to me on the YouTube User License Agreement, which can be found here.
Under the section "User Submissions" there is a clause as follows:
However, by submitting the User Submissions to YouTube, you hereby grant YouTube a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the User Submissions in connection with the YouTube Website and YouTube's (and its successor's) business, including without limitation for promoting and redistributing part or all of the YouTube Website (and derivative works thereof) in any media formats and through any media channels.
I've bolded my particular finding - I understand the need to the ability to reproduce and distribute the content, but by agreeing to this license you are apparently giving YouTube the permission to create works based on your content. I don't particularly understand YouTube's need or right to do this. If I'm wrong about this or am misinterpreting, shoot me a comment and/or email.