Video, based on conversations with some coaches, is helpful to a coach in a couple of ways:
1) What does the player look like - believe it or not size matters to many coaches, and they like to see your body.
2) mechanics - how you move might intrigue a coach enough to want to see you play more or at least make some phone calls about you.
While few coaches like to go on just video to recruit you, some programs are void of money to travel to showcases outside of their area. In that case you need to go to them, as has been discussed many times on this site. But a video might make it worthwhile to actually go see you when you do make the trip to local showcase X.
The other thing is that most coaches do not like unsolictaed videos - one RC at a D-I school does not look at them - and he has a TV and VCR on his desk- unless he has at least heard of you. He did say that others look at them all - just to make sure they don't miss winning the lottery I guess.
I did write an article for my web site on it though, so that might be helpful for you as well.
http://www.athletesadvisor.com/toolsrecruit/video.htm - an old archived article but useful since has comments from a college coach.
Would be interested in hearing others experiences with videos. There seem to be a lot of up and coming services that are offering this as their main business or as an add-on to other showcases.