My question is: If you have consumed all the available video ram, and attempt to create a new texture (SDL), will normal ram be used automatically instead of video ram? Or, will you have to attempt to use a surface (SDL), which uses normal ram? In the event you are unable to free the video ram for use for whatever reason.
Driver dependent, software renderer uses system memory obviously. GL based implementations use video memory, what happens when OpenGL runs out of memory is up to the driver, most likely it will end up in system memory.
Technically, you have no guarantee that there even is such a thing as video memory, OpenGL is just supposed to store it in the "most practical location", definition of that depends on the hardware (think hybrid memory, there is no difference in that case).
TL;DR; Yes, textures will be stored where there is space for them.