After searching completed auctions for broken iPhone 4s on eBay it appears that the median price is around $300 (US). If you get a good deal and are confident that you can repair the issue then it may be worth the gamble. However, I'm guessing it won't be worth it.
Definitely hardware related and most likely a logic board. If you don't receive more detailed responses here and/or don't feel comfortable repairing this yourself then make your way to a service center. Use this link to find one near you. The repair will likely be in the hundreds. Your data should be safe.
You can consult this Apple Knowledge Base article. From what I glean from your question it appears you had a screen lock code set and he had entered too many attempts. Is this correct? If so connecting the iPod to the computer it was originally synced to should do unlock. If not, you may need to restore the iPod.
Worst Case: It is bricked and may need to be replaced. Best Case: It is just a little messed up and needs a little push. Connect it to power via a wall outlet instead of your computer. Try holding the top (wake/sleep) button and the home button for about 10-20 seconds. Others may have better suggestions.
MacBooks can take just about any 2.5" SATA hard drive. The highest reasonably priced drive that meets these requirements would likely be a 500GB. You can get larger, but obviously 320 and 250 would be just fine too. Perhaps they would even be preferable if you can't see yourself doubling your needed storage space in the next 2-3 years. I'm not certain about the cost of the drive that mayer has suggested, but if you are mainly using your MacBook for internet, email, basic photos, music and watching videos there is absolutely no need to pay more for 10,000rpms. Most hard drives use half that, 5200rpms, which is unquestionably fine for the uses listed here.
Just about anything can be fixed. It is difficult to determine the issue without proper hardware experience. You can try to replace pieces and hope that they are the affected parts. Or you can take your MacBook Pro in for service. Use this Service Locator from Apple to find the nearest service center. Assuming that it is just the camera it may be possible that this individual part can be replaced. If not, or if other parts are effected, prepare for a greater service cost.
You could potentially sell a defective MacBook on eBay for up to hundreds of dollars. If you post what you know about the issue it is having and in the title of the auction state "parts" and "as is" people will get the idea.
Nicole, you may wish to setup a Genius Bar appointment at an Apple Store to have them look at this for. The issue could be any number of things. If it is happening during YouTube play back and not while watching other videos it is likely software related. The issue may be fixed by running "Software Update" which is available from the Apple logo in the top left of your screen. You can try a different we browser. For example, if you are using Safari you may wish to download FireFox (as mayer recommended) and try watching the same video again to test if you experience the same symptoms. There could also be corruption in your operating system which may require restoration. Whatever the case may be, backup any documents, pictures, music or movies that are important to you before taking it somewhere for help.
It could be a variety of things and should be diagnosed by an Apple certified hardware technician. It seems as though the computer is working properly besides the fan. If it is indeed a hardware issue it could be something small like a defective sensor or as expensive as a logic board replacement. If you aren't backing up, do so to keep your data safe in general, but also while the computer is in for service.
It sounds like there is a hardware defect. This needs to go in for diagnostics at a local Apple authorized service center. You can also use Apple's online Service Assistant. It could be any number of things, but I'd be prepared for a logic board issue which may cost a few hundred to fix :(