User generated content is in my opinion a very positive thing for the web and for the internet community as long as it is not done in a harmful and damaging way to anyone's reputation. For example if the content is making fun of someone's family or personal love life and making defamatory remarks about them I am against it. On the other hand if the content is positive and a unique way to interpret another artist's creation by adding new things onto something old and mxiing it in with another artist's work then I am all for it.
There is a lot of different user generated content floating around youtube and many other sites and one I particularly enjoy is Mega64 youtube vids of video game parody like skits. People make these skits based on video game character and act them out in real life. They see the reaction of bystanders when they do crazy things these video game characters are known for and film it. My favorite one of them is the Shenmue vid where a man asks a bunch of people in a park questions that the game's main character always asks in the game.
There is a lot of great user generated content floating around and I do not think it is going away. This is especially true with the social networking age and youtube age where everyone can be an artist or a publisher in a single day. It is a great time for people to display their talents online to see what inspires people or what do people enjoy before publishing similar things out in the business world.
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