For a video to stream online, it needs to be converted from its original format into Flash. When done well, your converted video will be of similar quality to the original, but with a much smaller file size. When done poorly, you'll end up with an ugly, unrecognizable video.
Before you get involved in converting videos to Flash, it helps to understand what video compression is and how video compression works. With this knowledge you can make adjustments during production - like getting closer to your subject and using brighter lights - that will improve the look of your video when it's compressed for the web.
YouTube and other video sharing sites will automatically convert your video, with good, bad or ugly results. If you're using a site that automatically converts your video, upload the best possible original file. This will get you the best possible converted file.
For some videos, though, you're better off using video compression software to do the conversion yourself. This gives you maximum control over all of the web video settings, and you can experiment to get the best possible result.