And if it would capture 720p video, then Vericorder has the app for you! They were showing their iPhone editing app at NAB, and now it's on the iTunes App store in a "Network" and "Consumer" version. Just to be clear, the "Network" version is free, but is for large media organizations (who pay a subscription) only. You'll probably want the Consumer version, which is $9.99.
I've seen a demo of it, and it looks pretty amazing, and if someone had offered this to me 20 years ago for $10 I would have jumped at it. So why do I sit here going....hmmm....640 x 480?...
I am very tempted to get it - and I probably should - though it does make me wonder what it would be like editing video on an iPad though.
Philip Johnston at HD Warrior has a bit of a review: 1st VIDEO an edit suite for your iPod Touch/iPhone
Vericorder: 1st Video
[UPDATE:] from reviews on the iTunes store, it appears that the app requires some hardware that's only present on the iPhone 3GS. It won't run on the iPad, and may not run on the iPhone 3G
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