Direct from the streets of Gaza - Demotix is the UGC picture agency
uk.techcrunch.com
uk.techcrunch.com
Maybe this time it'll do better than some of the earlier attempts.
Looking at other examples of citizen writing/editing, I'd say it will be a race to the bottom: staged and doctored videos and pictures, companies and organizations staging stories instead of PR releases, etc.
But it's definitely a feel-good kinda biz and story.
As for as this "new" tech goes. You are going to get a massive number of doctored photos - so many that the value of the site is basically zero.
The "idea" of paying them for the photos is useless - they don't really care, all they want is for the world to see, and for that there already is flicker.
So this site is nothing new, and with the problems they will have with forgery, it's DOA.
You get doctored photos in the mainstream media all the time. Agencies know their pictures will be seen by everybody. This makes the doctoring more likely.
And Flickr is not a news website.
If everyone could see what occupying armies do, they probably wouldn't be able to do as much of it.
Media is a huge influence on politics. The medium is an important part of what gets covered, how it gets covered, the narrative that goes with it & ultimately public opinion.
There is plenty written on what the television did to the US: Vietnam war coverage, civil rights movements & so forth.
New internet based media is bound to have an effect too as it allows for various new things. But I wouldn't conclude that it will be a positive one. For one thing, the concept of impartial news is out the window. From government groups to human rights groups to armed groups to soldiers with blurred out faces to the next door neighbours, the stories will reflect specific agendas, specific experiences and individual stories. Many will be embellished, forged or corrupted.