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When creating a content type and making configuration settings to the video field, you're told that "An illegal choice has been detected. Please contact the site administrator," if you forget to make a "Video thumbnails" selection (i.e. - you must select either "Manually upload a thumbnail" or "Don't create thumbnail", otherwise, you get the error.)
The thing that makes this a "bug" is the fact that neither of these options appears to be in a "Required" field group. I'm not saying this is an issue with the Video module per-say, however, something should be done to make sure users understand that one of these options MUST be selected before saving the configurations.