Rare live performances, NBA highlight reels, obscure homemade films and even University students dressed as Pac-man meet in what has become a new sort of Internet video-clip heaven: YouTube.

More popular - yet much less publicized - than Google Video, YouTube stands out as another Internet venture accelerating the evolution of video on demand, and Hollywood is just starting to notice.

What started as a simple way for co-founders Chad Hurley and Steve Chen to share video after a frustrating attempt to show dinner clips to friends has turned into one of the most popular sites of its kind, streaming nearly 15 million videos daily.

Hurley previously worked at PayPal - the popular Internet billing site - on a project used to beam money wirelessly, during which he learned how easy it is to share content along the multimedia avenue. With an investment from venture capitalist firm Sequoia, YouTube was born last year in Hurley's garage before launching last November.

While fairly popular at the time, YouTube's exposure among the younger set exploded overnight after the TV premiere of "Saturday Night Live's" "Lazy Sunday" rap late last December. The clip's notoriety grew with each mention on blogs, e-mail and television, cementing its place in the pop-culture lexicon and reviving interest in a show many had long since abandoned.

Network heads at NBC Universal, however, faced the catch-22 so many record companies faced with Napster: Allow the sharing of copyrighted material to generate necessary buzz, or turn your back on those who brought you back into the limelight.

Ultimately, the network issued an order for YouTube to remove all versions of the clip in question and any other copyrighted material.

YouTube immediately complied.

With a user policy specifically disallowing visitors to upload any copyrighted material, YouTube does not claim any infringement responsibility unless a copyright holder contacts them with a complaint. They then decide if the accusation is valid and remove the file immediately if need be.

But the process leaves room for abuse by copyright holders, Law Prof. Susan Kornfield said. "Online service providers like YouTube are going to react to a notice by just taking it down so they feel that copyright owners have the upper hand, because if they leave it now, they better be right," she said.

"If you're a provider, you don't want to be on the phone with your lawyer all the time," she added.

Regardless of the ever-expanding legal issues, media coverage and growing appreciation of the medium for web users' personal expression has helped the site reach astounding numbers - nearly 15 million videos streamed and 20,000 uploads per day - quickly surpassing Google's video collection and the more established ifilm.com.

Likewise, recalling memories of Napster's evolution, corporate America has begun to take a positive interest in new technology and its potential benefits. YouTube spokeswoman Julie Supan even revealed that large corporations such as Nike have secretly posted ads in an attempt at viral marketing, confusing their own legal departments.

Companies have also entered into more official collaborations with the hope of catching even a slice of YouTube's rapidly growing audience.

"Just as we have opened up opportunities for people and their personal contents, we potentially might open up for professionally produced contents on an official basis," Hurley said.

MTV2 premiered clips from the new season of "The Andy Milonakis Show," while various bands and record labels have uploaded music videos with descriptive tags (much like photo site Flickr.com), allowing fans to locate them easily.

With Hurley's adamant position that YouTube will remain a free service for all users, collaborations have become increasingly necessary to maintain the expensive servers hosting videos. But will media companies, reeling from the sting of low ratings, lackluster sales and decreasing box-office receipts, abandon their long-standing fear of the Internet's uncontrollable nature?

Sites have already popped up with easy step-by-step tutorials that teacher users to download the videos from Google and YouTube onto their hard drives - so what's to prevent them from becoming a Morpheus or Limewire in disguise?

"With any open system, you're (going to) have a small percentage of people who take advantage of that," Hurley said. "We're constantly improving that and putting more flags and technology in place to control any kind of violations on our site."

YouTube has responded in part by implementing a 10 minute maximum on uploaded videos and decreasing copyright-complaint response time.

Legal distractions aside, YouTube is pushing forward with new innovations to enhance the community. Networking sites like Myspace.com and Facebook.com continue to grow in popularity at an unprecedented rate, and YouTube looks to become the media epicenter of the Internet.