1. What happens when you have several servers? For example, what if I add 3 servers, plus my original server where the site is hosted. What happens? Does the script just select one at random each time or what?
Ans: I have tested my webpage with one FTP server so i dont know exactly what will happened but while i was trying to add multiple servers i noticed newly uploaded files going to last added server..

2. How can we use a sub-directory? I'm personally not comfortable with giving this script root access, not to mention cluttering up my root with hundreds of flv files. Why can't I just make a sub-folder and create a special ftp account for the script to access that folder? I dont understand why this wont work and want to know what I can change to make it work.ANS: Please check this picture. This has sample setup how to add a certain folder in ftp folderhttp://pinoymonster.com/multiserver.gif

3. What if I want to move existing files to a specific server; how can I do this?
Ans: Go to mysql command line using phpmyadmin.
Execute this command:
UPDATE video set server_id=NEW_ID WHERE server_id=OLD_ID

Note: NEW_ID "its ur original/old server id. I found out its "0"zero by default"
OLD_ID "its your New Server ID. Which you can find in top most part of my picture which is 1(one)"
Example UPDATE video set 0=NEW_ID WHERE server_id=1

It did work for me. But make sure you have put correct server ID & transfered your FLV from old server to new FTP location.
Its always better to keep backup of your database before you do so.

I'm also curious about things like what if I want to change hosts, is this a problem, or how this effects search engine crawling, etc, but the questions above are more important.
Ans: Could you be specific what type of problem did you meant?