i red this from apple's home page... (in finnish)
H.264-video 720p, 30 fps,
MPEG-4-video, 640x480p, 30 fps
Motion JPEG (M-JPEG), 1280x720p, 30 fps
So i understand it that you have options in which format you're filming, can you change that?
i might be wrong though...
E:
http://www.youtube.com/watch?v=uT7mhr7EjSI filmed by iphone4
And i can ask this problem from my brother when he comes home, he should know.