That looks like an interesting site. If enough content producers were willing to make content available for an unspecified amount of ad revenue (50/50 could be 50% of nothing), it could reach critical mass. Otherwise, it's hard to break the hegemony of YouTube. I would be interested in uploading a short, if I knew I could not sell it on DVD or PPV. A 640x360 format is so close to [SD] DVD quality that the consumer would not have much of an incentive to purchase a DVD after downloading the 640x360 version.
Given the amount of content out there that is good quality entertainment but can't go for DVD distribution or theatrical distribution, I'd think there is a place for OpenFilm. The challenge, of course, is for OpenFilm to get enough ad revenue to keep it's doors open. Splitting it 50/50 with content producers is generous, but may make it that much harder for OpenFilm to reach profitability.
Just rambling,
Doug