AdSense ads are usually pretty relevant, but I'm guessing that Video Ads will hurt relevance a lot. They may still work - especially as a novelty, but they won't be very Googly.
This hit me after reading a brilliant observation on the sem2 discussion group - I had asked what besides Movie trailers, car ads, political / advocacy ads and real estate would be good candidates for these new video ads. Matt McGee replied:
In all seriousness ... any category in which the ad can show attractive females scantily clad and get away with it.
Damn - he's right, it's the "porn drives media adoption" crossed with "sex sells." Brilliant and obvious. It's pure liquid money to the first advertiser who executes that well.
And if you think about it - no matter what Google is saying about how these ads aren't intrusive since they don't play automatically - the format is going to reduce relevance. Video simply is not text and can't easily be contextually relevant, by definition.