Back in 2007, YouTube launched a more advanced Flash-based video editor called YouTube Remixer, but it was discontinued. Today YouTube has launched the new YouTube Video Editor that lets you to create video mashups from the videos which you have uploaded to your account.
YouTube Video Editor is a browser based video editor for your YouTube videos. You can create video excerpts from the uploaded videos on your account. You can also add a music file from the AudioSwap library, but YouTube mentions that it might display ads if you use some of the audio files.
Here is the sample video which is created using YouTube Video Editor :
YouTube Video Editor – Homepage