The default view for Google Video, TV view, has been updated and you can now search for videos without interrupting the video that is already playing. You can go to the next page of results or reformulate your query, while still watching a video.
You'll also notice that Google Video can play videos inline not only from Google's sites, but from many other popular video sites (some notable exceptions: AOL Video, MySpace, Yahoo Video).
Google Video started by close-captioning TV shows, then moved to hosting videos, searching videos on the web and now the natural evolution is to come full circle back to close-captioning videos. Maybe in the future Google Video will bring back playlists and we'll be able to watch a selection of videos, like in YouTube Fast Search.
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