YouTube’s got a few different types of videos: Public, which is 100% viewable, showing up in search results, your own channel, and in the Browse section; and Private, which requires an invite and a YouTube account to view, and can only be shared with up to 25 different people. The recently announced Unlisted is somewhere in between.
An Unlisted video is unlikely to be stumbled upon, but has fewer limits than a Private video. It won’t be listed in the Browse section or on your own channel, nor can it be found through searching. But anyone with the URL can see it. That’s good in that it allows users to show more private videos to those who don’t have or don’t want a YouTube account, but it also means somebody could simply post the URL on a blog or whatever and it’d be viewable by all.
I can’t honestly think of a scenario in which I’d make an Unlisted video, which isn’t necessarily a criticism. More privacy control options is always a good thing, whether or not I can see any particular use for it.