I was going to make a thread called 'YouTube Sensations' but then I saw this was already here so I'll post it here. There are SO many amazing musicians that I discover on YouTube, and who become quite well-known via the medium. They may not have an album out or anything, and they may be singing/ playing in front of their webcam, but they've got thousands of subscribers and hits. Here are some of my favourites:
Juliana Daily (you can download a lot of her covers and originals from her Last.fm page which can be located in her YouTube user profile):
The Bathroom Girl:
This young lady, I think her name is Francis - Tool have posted her videos on their blogs.
Jack Conte:
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