Censorship or Manual Filtering?
Littleman tipped us off to a post on Travoli's blog pointing out that Google is filtering content in the US, but it looks like Google changed some wording around.
The original quote was:
News stories have reported Google’s decision to censor content within China. But is Google also censoring content in the USA? Searching for "big boom" on Google’s own video search service returns a listing for this video of an IED explosion.
Instead of a video playing, a message appears, stating:
"This video is not playable in your country."
That error code was what people got in the US. The content is available in countries like Canada.
Google changed the error code to "We're sorry, but the provider of this video, not Google, has chosen to disable playback in your location."
Amazing what a difference a few words make, eh. Will many content producers create content and block the US?

This has been debunked
Please see:
http://www.boingboing.net/2006/02/21/google_censoring_ira.html
Key Except from BoingBoing:
Happens in Canada
Happens in Canada all the time. Just like I can't go to NBC and watch Olympic video from here.
why?
Why on earth would someone want or need to block out a whole country from seeing a video? What is the purpose of that feature?
rights
You typically negotiate rights for some region, eg. a country. That can be full rights, or partial rights, eg. some rights for a format, some other rights for the music used, etc.
It's a bitch. And just when we thought we finally had the worldwideweb and fat pipes and everybody could watch the same video footage as everyone else... sheesh.