I have seen many websites which allows users to download videos.Now is it legal for this site to provide such service?Am asking this question since i have developed a website that will allow people to download youtube videos.Now i want to know if its legal before i put my website live
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No. Well, maybe. It depends on how enforceable YouTube's Terms of Service are in your country.
Analyze this document and search for word "download". It clearly says:
Also this part looks interesting:
You agree not to use or launch any automated system, including without limitation, "robots," "spiders," or "offline readers," that accesses the Service in a manner that sends more request messages to the YouTube servers in a given period of time than a human can reasonably produce in the same period by using a conventional on-line web browser. Notwithstanding the foregoing, YouTube grants the operators of public search engines permission to use spiders to copy materials from the site for the sole purpose of and solely to the extent necessary for creating publicly available searchable indices of the materials, but not caches or archives of such materials. YouTube reserves the right to revoke these exceptions either generally or in specific cases. You agree not to collect or harvest any personally identifiable information, including account names, from the Service, nor to use the communication systems provided by the Service (e.g., comments, email) for any commercial solicitation purposes. You agree not to solicit, for commercial purposes, any users of the Service with respect to their Content.