In its Official video blog, Google team says:
In a few months, we will discontinue support for uploads to Google Video. Don’t worry, we’re not removing any content hosted on Google Video — this just means you will no longer be able to upload new content to the service.
So, people who have already uploaded their videos (including me) need not panic seeing these bad news by Google as existing videos will be left as it is. But new uploaders need to search for some alternatives. And I think YouTube is the best alternative available!
Link: Official Release