Partnering with Adobe and using their Flex software, Photobucket has added rich video editing tools. Currently run as a beta program available to paid Premium users, Photobucket CEO Alex Welch assured us in a phone interview that all 35 million users would have access in March.

According to Comscore, Photobucket is the sixth most popular ‘Entertainment’ site with more than 17 million visitors. With 35,000 new videos uploaded every day they also claim themselves the third most popular video-sharing site behind only YouTube and MySpace. Additionally, Welch says over 50,000 slideshows with photos and sound are already being created each day.

When asked how Photobucket’s new service differs from the offerings of Jumpcut, Cuts, Eyespot and the like, Welch pointed out “the big first difference is we’ve already got all the users and all their content.” He also touted the product’s ease of use — the Flash Player 9 based interface allows for real-time editing including audio, trims, graphic overlays and borders.

Users can then share their mashup via email, by publishing directly from Photobucket to most major blogging services, or through copying and pasting the HTML code to embed the Flash player on virtually any web page. And users aren’t limited to their own content, but can also select from 2.5 billion publicly shared images and clips.

They generate revenue with ad impressions, but won’t be pushing ads within slideshows and video ‘mashups.’ When asked about the financial terms of the deal with Adobe, Welch declined to share them. He did tell the Denver Post that the deal gives Adobe “a chance to get its tools and brand name in front of millions of users.”

Additional reporting by Jackson West.