When Viacom demanded that YouTube take down 160,000 videos which supposedly violated its copyrights, caught in the crossfire was a MoveOn.org parody (above) of Comedy Central's "The Colbert Report." (Viacom owns Comedy Central). The video was taken down per Viacom's request, which resulted in a lawsuit from the Electronic Frontier Foundation and Stanford Law School on behalf of MoveOn.org. Responding to the lawsuit, Viacom realized that the video indeed was a parody, and thus covered under the fair use doctrine. Viacom withdrew its objections and took further steps to remedy erroneous takedown notices in the future. As a result, the lawsuit has been dropped.
While the video in question is clearly a parody and creates a new work based on excerpts from "The Colbert Report" (with interviews from folks like Al Franken and David Brock), Viacom's capitulation raises a thornier question. Like: How many of those other 160,000 removed videos could also be considered fair use?
Any video clip cut straight from a TV show with no new material added is probably still not fair use. Although, you've gt to wonder whether the mere act of posting a video to YouTube is "transformative" simply because it is an act of communication. That's probably a stretch. But most mashup videos may qualify, even if just a new soundtrack was added, especially for parody purposes.
You can be sure that Viacom is going to be asked to revisit many more of those 160,000 takedown requests. Viacom's lawyers may have caused more problems for themselves than they solved.