YouTube video questions

I have been asked the following questions can you help me answer them..

Couple of questions - videos from Youtube, are they merely being indexed on your site while continuing to serve the content from Youtube, or is the video itself relocated onto your site? If relocated, are the options to specify display resolution etc all still intact and what happens to the monetisation/advertising that content owners have applied to their videos?

That last question is an important one as content owners are not going to be happy if their videos are being relocated and viewed on a non-Youtube site, depriving them of Adsense income.