Dangerous to take this thing out and film yourself... but like most devices, your human hand will adapt.
After shooting this quick burrito movie at Chipotle I have noticed that the data rate of the H.264 video varies between 3600 Kbit/s and I would assume 3800 Kbit/s which isn't a tremendously high data rate for doing anything serious with... but respectable for a mobile device. Relating this to a Canon PowerShot SD780is that shoots in 1280x720p at a 25 Mbit/s compression rate - there really is no comparison.
iPhone 3G S Video Specs:
FORMAT: H.264, 640x480, Millions of Colors, AAC, Mono, 44.100 KHz
DATA RATE: Between 3650 Kbit/s and 3800 Kbit/s