Have you checked out interactive YouTube videos and wondered how they were created? How it works: while the video plays, it offers options through links embedded in the video, which take you to a different place on the timeline or to a different video, which offers new options, and so on.
The combined effect is a seemingly infinite number of choices, but for interactive YouTube videos it is in fact very finite: a separate video has to be created for each choice. The interactivity is created by overlaying annotations on top of the video. Annotations were previously used solely as captions or speech balloons leading viewer to another site for more information related to the video. Now they are transforming YouTube from a static video player to a tool for engaging the audience.
The YouTube Annotations Editor is a creator tool that lets you layer text, hotspots and links over your video, thus enriching experience with information, interactivity and engagement.
Hunter shoots a bear - http://www.youtube.com/user/tippexperience
Blend Your Own Adventure: http://www.youtube.com/watch?v=DcJFwy7KPBA
The Time Machine - http://www.youtube.com/watch?v=l8rJ1WML60Y
How to make an interactive video - http://www.youtube.com/watch?v=OMrMEydnFFA
Annotation Man: http://www.youtube.com/watch?v=TqzlqPK0VVY#t=19