Yes, we have already started developments of the video module and working hard to release a stable version very soon. So the D7 video module will be the most advanced video solution for D7. We will continue all the D6 features set and adding new features like editable presets and export compatibility with ChosTools, Features modules blah blah.
With the D7 file-system changes, I would say that its a fantastic but very challenging task to the video module, as we provided Amazon S3 support in D6 so yet to define S3 stream wrapper for D7 or we will discontinue that sub-module since users can find alternative in the contributed universe.
Oki, this discussion is meant to get some feed back on how to integrate Media API with video module?, so far we have the video module compatible of handling uploads (We have Video field), create thumbnails, convert videos. Now its time to integrate with the Media module as we should power it up with a great video solution and I think video module is capable of it.
In the video module, we have factory implementation for the Transcoders, so you can use any type of transcoder, eg: if you want to host your video in Vimeo, Blip.tv you can extend the Transcoder interface and create your own transcoder. Creating thumbnails also defined inside the Transcoder class. Basically you can use any type of video hosting solution with the video module.
So its pleasure to mention that we will start Media API implementation to the video module in near future so all Media module users will get this good news with more benefits very soon.