I've been giving a lot of thought lately to the right way to use web video. Because when it works, it's very cool, but more often than not, it's just gratuitous.
One of the things about the web, for those of us with short attention spans, is that it allows us to multi-task. Many is the time that I've loaded up some web video, realized it was just a talking head, and clicked off to some other site and treated the video like a podcast-- just something playing in the background.
Which isn't the worst thing, I mean I actually processed the information. That's more than I do with a lot of web videos which seemingly drag on forever, taking advantage of the "no time limit" exception online. Which is great in that it lets you tell your story in 37 seconds instead of 30, but unless I am specifically there to watch your video, shorter is always going to be better.
And that's the key thing right there: Most people are online to read. To scan, actually. They're there to quickly and efficiently gather information. Your long-winded video is not part of that equation, no matter how compelling it is. So your site becomes user-unfriendly because you're making the user stay there longer than they want in order to watch your video. (Or, just as likely, you're losing them.)
Now if I'm going online to actually watch videos (e.g. YouTube) then that's a very different story. I've already mentally alloted the time. But for sites that are text driven, the less video, the better.