The jury’s still out on whether trailers actually sell books. Regardless, they showcase your work if you place them on YouTube and promote them on Blazing Trailers, Facebook, Twitter and other social networking sites.
The videos range in price from less than a hundred dollars to several thousand, or you can produce them youself. My first book trailer for my historical novel, Escape, was created by a student who did a credible job for $60, but I wasn’t impressed with the music or photo quality. So I hired a professional to produce my second trailer, for $475, which carved a nice chunk from my royalties. A Village Shattered video earned four and a half points out of a possible five from a video judging site, First Turning Point. The only nit mentioned was punctuation within the video, but it wasn't produced by a writer.
My self produced video, Diary of Murder, only earned three points from the same site. Among the nits, the judge said the music was too recognizable. The bottom line is that both books have sold equally well, so the expensive trailer was probably a waste of hard earned royalties. But you can judge for yourself. I haven't produced a trailer for my latest releases and have noticed a difference in sales figures, so I conclude, in my own case, that trailers do help sales. And new software has been developed since my own efforts, which produce much better videos, including Windows Movie Maker and iMovie which comes packaged in a bundle called iLife for iMac users. A good description of how to produce your own free video: http://www.jungleredwriters.com/2011/10/how-to-make-your-own-book-trailer-free.html at the Jungle Red Writers blog site.
Whichever route you decide to take, book trailers are worth the investment if you have the time and energy to promote them.
Note: I've since changed Diary of Murder's cover and the books are no longer available on Fictionwise because my publisher died and orphaned the books. They are, however, now available on Kindle, Nook and print editions.