Google Video has clearly lost face with YouTube because it wasn't pushed out front as much as the video sharing service. The team must be trying to bury it altogether after removing the fast forward option. A close analysis of the two services shows that YouTube caught great speed after being added this feature, while previously only Google Video had it and was doing pretty well.
If it's a policy to make users migrate from one to another, a much better
method was to have just shut it all down, rather than making people lose faith and turn to the other out of disappointment. What Google must have thought would work to its advantage was the much smaller fan base of Google Video, as opposed to that of YouTube. A full scale riot and a tsunami of complaints would hit the Mountain View complex if it was the other way around.
As far as I can tell, in the area I'm in, YouTube still has the fast forward option and nothing was announced to be changing anytime soon. Waiting for all the video to load when you move the pointer ahead of the current position will most certainly be something dreaded. In an era and a society that's moving faster and faster every day, buffering is not your friend, and furthermore, I can say that it's actually an enemy. It would cause massive migration to other sites like Metacafe in an instant.
Many fans of Google Video have voiced out and asked why their favorite player was crippled, but no official response from a member of the team has been released this far. YouTube fans should also follow this closely, as with all the changes foreseen (HDTV quality, no compression, possible streaming), some mishap like this might come to be and a strong reaction would help.