Video recording is now semi-working on the iPhone with the help of Drunknbass at Monster and Friends. It is currently recording 40-45 fps and limited by the iPhone’s ram. It can capture 2mp quality at 10fps for 10 seconds, and record 5 seconds of video and replay it. There is no user interface, and is a very simple proof of concept. The video is stored to memory. The final app will be able to record somewhere from 15-30+ fps and should have an unlimited file length. Lots of people have been posting video of it in action. Here is a sample:

Use iPhone mods and hacks at your own risk! Installing 3rd Party iPhone apps requires you to jailbreak the iPhone before installing the native software and apps. You can use Installer.app for Mac OSX and iBrickr for Windows PC to do this. Browse the full list of all iPhone and iPod touch native 3rd party apps filed under the software category. Log in and download the file here