Also of note, the updated Web galleries will work with movies made with iMovie '08. There's also a new option right in iMovie '08 to send the video straight to YouTube.
We're not seeing anything revolutionary here that hasn't been done on other services such as Flickr and Zooomr, but it does look pretty slick. The one big catch is that you have to be a .Mac subscriber to take advantage of these galleries. This is a nice plus if you use the service, but it's hardly a competitor to other photo services that are open to everyone. The one real surprise from this morning is the storage bump from 1GB to 10GB, which is necessary when you're splitting that space between e-mail, photos, and videos.
Update: To take a look at a Web gallery yourself, Apple has posted an example here. Keep in mind it might be a little slow today, since a lot of people are hitting the page at the same time.
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