Uploading videos with the Media uploader
The video module is strictly for videos that your users upload. You need to configure the transcoding (ffmpeg on your server or use the external Zencoder service).
If you want to embed Youtube or Vimeo videos you can use video embed field module.

I've combined the two to allow video uploads and video embeds. However I really prefer the video embed field since dealing your users uploading a ton of large video files isn't trivial.