The video discusses the importance of designing fillets and radii on machined parts with a focus on their impact on manufacturing cost and assembly ease. It highlights that external radii may pose no cost impact unless dealing with large blocks, while internal fillets should be designed slightly larger than the cutting tool to avoid deflection and assembly issues. The video emphasizes the need to consider tool availability and machining processes, whether working in metric or imperial systems, to ensure easier and more efficient manufacturing. Special attention is also given to the effects of heat treatment on fillets and how improper design can lead to problems during assembly. The video encourages thoughtful design choices to ensure parts fit together smoothly without surprises.