A Miami television station aired a story completely shot on an iPhone, as they covered the launch of the iPhone 3GS. The video looks pretty good, and once it was shot it was uploaded to Final Cut Pro for editing. Although you can trim the beginning and end of clips on the iPhone itself, you really can't edit.
The story aired on WFOR's 5PM News. The reporter, Gio Benitez, also used the iPhone Voice Memo app to record his narration, so the piece really was a true iPhone production.
Here's a link to the WFOR web page and that contains a link to the video as it aired on the news. If you want to go directly to the video it is here.
Of course there is nothing new about video on a cell phone. It's been around for quite a few years, but with a faster processor giving the user a nominal 30 frames per second, decent video is now a reality.
Don't confuse the video from the iPhone with what a good consumer camera can do, and my Flip minoHD cam looks a bit better, but for capturing something on the fly, it's a nice thing to have.
One other note. If you upload the video to MobileMe or YouTube the phone will compress the video before you upload and it won't look nearly as nice when you get it right off the phone before that compression step.
Thanks to John in Indianpolis for the tip.