How Youtube Videos Work? Where are the Videos Stored?

The stuff is stored in servers.Now the servers are not those of the very high configuration,they run with ~1gb ram and 200gb hard disk and run on free cheap linux operationg systems.Also there are servers localozed for every location.So a indian computer downloads contents of youtube from a server somewhere in india.Similarly for japan,china,germany,singapore..one way to find the place where the servers are located is to get its ip address and find it using any software or website.

now: as you have asked - similar to the way the google searches for text as you type it searches for videos and then these are streamed to your computer and the browser that you are using handles the video streaming /reciving and takes the video playing plugin that you have installed and thus the video is played!!