Soapbox vs. YouTube: Who Is The Copyright King?

Microsoft and Google have been locked together in a corporate struggle of titanic proportions for the past few years, one from which a clear victor has yet to emerge.  The battle sprawls from search engines, to office suites, and now the video services are becoming the new focal point of the conflict.

On the Google side of the line is the reigning king of video sharing services, YouTube.  In Microsoft's corner is the up and coming Soapbox.  Both services have a few unique twists, but at the end of the day they're just different takes on the same concept.  Microsoft and Google aren't the only two players present, however.

In fact, there are numerous sites following the 'me too' business model, but at the moment they don't seem to be a major threat to either of the major players.  The real threat is coming from copyright infringement and the subsequent litigation.  Microsoft seems to be sidestepping this problem, or so they say:
“Thomas Rubin, Microsoft's associate general counsel for copyright, said that unlike YouTube, Microsoft's Soapbox video-sharing site is designed to work in concert with copyright holders and that it represents an effort to be a good corporate citizen. Soapbox uses Audible Magic fingerprinting technology.”
It's not 100% clear at this stage what technologies and techniques are going to be required of video sharing sites to make sure they are doing enough to control copyrighted content.

What are reasonable compliance guidelines  in your view?  Is there any way to control the spread of illicit material, while simultaneously allowing users enough freedom to express themselves in a timely fashion?