So I just got my iPhone 3GS (3.5 hours ago) and still having activation issues but I thought I test out the video camera.

So I captured two videos with this iPhone. One I uploaded directly from the iPhone to YouTube and the other I downloaded to my desktop via USB. The direct to YouTube does not produce as high a quality video, as compared to the desktop downloaded version. In fact, the one I downloaded from my iPhone to my desktop over USB is HQ (high quality) compatible with YouTube. The one I uploaded directly to YouTube via the iPhone was compressed more and not HQ compatible.

Here is the HQ one:


Notice the "HQ" button in the play bar after you hit play.

Here is direct to YouTube via phone:

I am a bit sick, so please excuse my appearance.