I've been watching online videos even before Youtube got popular, and I've seen my share of the other flash based video distribution system from other places, like the ones at Metacafe or Collegehumour. At first I thought the difference in quality that the &fmt=18 Youtube hack (now accessible on each page where higher quality is accessible) was the best thing ever, and it was only many months after that I checked out the in-house system at CollegeHumour and realized how awesome the quality was. Sure, the load times were considerably longer, but if that's the price to pay for content that looks good full screen on a 720p TV, than I'll wait the 5 minutes if I have to.
And after seeing both of these systems, I realized that they don't even come close to what Vimeo has to offer. Now I know, for many Vimeo is no news, but I've just been introduced to the thing by the BMX industry, which uses Vimeo a lot to post up high quality web edits and teasers for bike enthousiasts to enjoy. Unlike Youtube, Vimeo works with a monthly upload limit, not a time per video limit like Youtube does, which allows them to regulate the amount of videos added, while not sacrificing any quality. Also unlike Youtube, 720p HD is fully supported! While the image quality, even in non HD mode, is tons better than on Youtube, high def is where it's really at. You have to see it to beleive it really. I was pleasantly surprised about the load times too: although it takes a considerable amount of time to load the video, it's not as bad as the other systems I've seen featuring higher definition. A bit thing that has been hurting Youtube a lot also is very poor support of the more and more popular widescreen formats. 16:9 is the norm, yet I still get those ugly black bars on Youtube, as if the video window wasn't small enough. Vimeo has full support of 16:9, and probably does support other cinematographic formats without wonky up your video files, although I haven't checked. But then again, if you're shooting in 2.35:1, your most likely to release your content on Bluray disc, not on the internet.
Apart from just raw picture quality, I think the Vimeo site is just overall better designed. Stuff like making time indications in questions like "What's that in the corner at 1:28" into hyperlinks to that part of the video is just pure genious. I feel that the comments system is also easier to read, but that's just me.
And also, Vimeo has this little feeling to it that you get when you use something that's not mainstream yet, this little thing that tickles the anticonformist inside all of us. But seriously, being less mainstream means that you're less likely to fall on shitty reposts, poorly ripped TV shows, and japanese 14 year olds waving to the camera in a hotel room in New York, and other crap of the like.
So to recapitulate, for small sub-90 second clips there's Flickr Video, for the masses and visibility there's Youtube, and if what you want is to distribute high quality content for display on say, your website, and don't really care about people not finding your stuff while just browsing, Vimeo is what you want.
More original content. Higher quality. Do check it out, and use it to upload!