I uploaded a video in the past with a song that was muted since the record label that produced the album was the owner of the song. Do you know which record labels Google does not monitor and allows users to upload their videos using those record labels' songs? I heard a lot of popular songs in videos so YouTube must allow some record labels' songs to be used. I tried using YouTube's free library of songs and it is just not good.
Its not that the youtube monitors for the record labels, its that the record companies ask youtube to monitor for certain songs. People that are concerned about copyright protection can send samples of their music to youtube. Its then put into a monitoring system. When a video is uploaded, its scanned for music or videos that companies have submitted samples to watch for. You can read more about it here http://www.youtube.com/t/copyright_program http://www.youtube.com/t/contentid