YouTube has a new video editor that lets you create videos using excerpts from the videos you've already uploaded. You can also add a music file from the AudioSwap library, but YouTube mentions that it might display ads if you use some of the audio files. In 2007, YouTube launched a more advanced Flash-based video editor called "YouTube Remixer," but it was discontinued. The service was based on Adobe Premiere Express and, despite offering features like transitions, captions, adding images, it was slow and buggy.
With this new editor, you can: Combine multiple videos you've uploaded to create a new longer video; Trim beginning and/or ending of your videos; Add soundtracks from AudioSwap library of tens of thousands of songs; Create new videos without worrying about file formats and publish them to YouTube with one click—no upload necessary
More Info: YouTube's video editor