Looks like YouTube move is inspired from Gmail and Docs where drag and drop functionality is already available. If you have a latest version of Chrome or Firefox then you can easily upload video on YouTube by just drag and drop. YouTube recently added this feature to makes the process more simpler. Previously, user need to click on the upload button and select the video from the opened explorer window.
To upload video, you need to login with your YouTube credentials. After that go to YouTube Upload link and drag any video from your desktop or any other location to the YouTube interface. YouTube will start uploading it.
If you are using Safari or Opera browsers then you’ll be bit disappointed because the feature is still not available in these browser in-spite of their HTML5 support.
Thanks CallingAllGeeks, TothePC.