EDIT :
Took me a while to figure this out (didn't have the correct references to the .swf), but here is a complete working example (tested IE 8 & Firefox 4)
<html>
  <head>
    <script type="text/javascript" src="http://ajax.googleapis.com/ajax/libs/jquery/1.4.2/jquery.min.js" ></script>
    <script type="text/javascript" src="http://zeroclipboard.googlecode.com/svn/trunk/ZeroClipboard.js" ></script>
    <script type="text/javascript" >
        $(document).ready(function(){
            var checkall = $('#checkall');
            var boxes = $('input[type="checkbox"]').not(checkall);
            checkall.click(function () {
                boxes.attr('checked', this.checked);
            });
            boxes.change(function() {
                checkall[0].checked = this.checked && boxes.filter(':checked').length === boxes.length;
            });
            ZeroClipboard.setMoviePath('http://zeroclipboard.googlecode.com/svn-history/r10/trunk/ZeroClipboard.swf');
            var clip = new ZeroClipboard.Client();
            clip.glue("copyvalue");
            clip.addEventListener( 'onMouseOver', function(){
                var text = ' '; //Make this a space since we can't copy nothing...
                $('input.forminput:checked').each(function() {
                    text += $(this).val() + "\n";
                });
                clip.setText(text);
            });
        }) ;
    </script>
  </head>
  <body>
    <input class="forminput" type="checkbox" value="test one" checked="checked" name="VD1">
    <br>
    <input class="forminput" type="checkbox" value="test two" checked="checked" name="VD2">
    <br>
    <input class="forminput" type="checkbox" value="test three" checked="checked" name="VD3">
    <br>
    <input class="forminput" type="checkbox" value="test four" checked="checked" name="VD4">
    <br>
    <input class="forminput" type="checkbox" value="test five" checked="checked" name="VD5">
    <br>
    <input id="checkall" type="checkbox" checked="checked" name="checkall">
    <input id="copyvalue" class="button" type="button" value="copy test">
  </body>
</html>   
ORIGINAL:
You don't have a click event for your button. 
You need to add something like:
    var clip = new ZeroClipboard.Client();
    $("#copyvalue").click(function(){
        var text = '';
        $('input.forminput:checked').each(function() {
            text += $(this).val() + "\n";
        });
        //alert(text);
        clip.setText(text);
    });