Google Video Sitemaps provide Google with metadata about video content on a website. The video site operated by Google is the largest video search entity on the Web. With a Video Sitemap, site owners can inform Google of the category, title, description, running time, and intended audience for each video contained on the site. This helps Google know about all the rich video content on the site, which should improve the listing of the site on video search results.

When supported format video information is either submitted as a separate Sitemap or included in the regular Sitemap, the included URLs for the videos are made searchable through Google Video. The videos may also be accessed through other search products offered by Google. When users find the videos through Google, they see a thumbnail image of the video content and related information, which is pulled from the Sitemap. They are then linked to the hosted environment for video playback.

NOTE:

Sitemap Generator script automatically detects embedded videos on your pages and creates a separate sitemap with related details. In the current version of the standalone sitemap generator the following video sources are supported:
YouTube, Google Video, Vimeo, Dailymotion, MTV, Blip.tv.
Additionally, VideoObject Schema markup is supported.

An example of Video sitemap file on our site: sitemap_video.xml (yes, we don't have a lot of videos on our site :) )

You can find more details on google webmaster tools help pages.