SEO Benefits of Video?

I have been considering launching a youtube or google video-type campaign for one my clients, but their main concern is traffic and not (as is the usual point of launching a viral campaign) brand building. There must, however, be SOME SEO benefits to video...no?

As a case study I've been looking at the recent videos Gary Busey did for Gotvmail:

www.garybuseyonbusiness.com

Now, all the videos are hosted at youtube but they also created a directory for them within their own host -- very clever.

But, if a person only goes to youtube and watches these videos, it doesn't necessarily help SEO or traffic, yes? Or is the semantic web more complex than I assume?

I have a client who runs a site with tens of videos, which are now hosted on his server (previously he used brightcove.com hosting with a custom made player) - he decided to host them himself to be able to better control filenames as well as to be able to build a Google Video Sitemap and submit it (doing so helped him get ~ 50 videos indexed within a few days from sitemap submission).

I strive to believe more and more that having videos on your site helps a bit in the overall SEO process. If I would be Google or any other (smart) search engine, I would assume (correctly in most cases) that a site that hosts videos, maybe using keywords in the filenames (an analogy with SEO for images) as well as being surrounded by relevant text would probably be:

a) a serious site, built to last - I still haven't seen a spam site hosting its own videos, the effort is too big for a short period success;
b) an interesting site for users because with the high speed connections that nowadays pretty much everyone has plus the high interest in online videos.

Something else I can state as a true fact that I have observed in the last couple of months by working on this site which hosts tens (maybe hundreds) of videos is that generally, videos are an effective link baiting method.

Now, to try to answer your specific questions, I think it is worth to start a "video submitting" campaign. I have seen lists with over one hundred youtube style sites to which you can submit your videos. If you can edit videos to add a clickable link to each one you submit, that could be a way to bring some traffic to your site. Some of these video sharing sites allow links (some DoFollow, some NoFollow) so you could benefit from that too). Other than those 2 aspects mentioned, having your videos posted on so many resources increases the chances of people interested in your site's subject find it, like it and link to it.

Finally, my personal opinion is that if you have or can do videos easily and have the time or resources to spend to hire someone to submit them, they are worth being submitted.