Free video editing software on the iPhone is available with Splice from Path 36. The basics of editing are here in smaller form, but nonetheless, the same concepts that desktop editing programs offer.
Improvements in this version include HD, video trimming, bulk imports to the timeline, the Ken Burns effect and overall usability innovation. I keep thinking of important features like multiple audio tracks, speed control and custom text positioning and they are included. The app also sells music, sound effects and backgrounds to accompany your iTunes library. An ad free version costs less than lunch at $2, so now you have the abilities of a studio in your phone. The new software allows all phases of video to be done out-of-pocket, from pre-production through shooting, editing and sharing. This combination of quality and mobility may further fudge the line that divides home videos from professional productions.