According to CinemaTech, the downloads are without DRM, which will probably keep the big media companies away (good for indies!).
The pricing structure seems to be an iTunes-like $.99 per short video for the three partners listed in YouTube Blog’s announcement. These are educational/how-to video creators and word is that educational/how-to was what sold well on Google Video. Payments must be made using Google’s version of PayPal, called Google Checkout.