No you didn't misread that. You can legally encode video on your iPhone. However, that doesn't mean there's suddenly an Apple-approved video app. What it does mean, is if you dig deep enough into the iPhone licensing agreement (remember, you just pushed agree?), in Section 16 of the Apple license agreement to be exact, it states (caps are Apple's):
THE AVC FUNCTIONALITY IN THE iPHONE SOFTWARE IS LICENSED HEREIN ONLY FOR THE PERSONAL AND NON-COMMERCIAL USE OF A CONSUMER TO (i) ENCODE VIDEO IN COMPLIANCE WITH THE AVC STANDARD ("AVC VIDEO") AND/OR (ii) DECODE AVC VIDEO THAT WAS ENCODED BY A CONSUMER ENGAGED IN A PERSONAL AND NON-COMMERCIAL ACTIVITY AND/OR AVC VIDEO THAT WAS OBTAINED FROM A VIDEO PROVIDER LICENSED TO PROVIDE AVC VIDEO.
So there you have it. Record/Encode video on your iPhone 'til your hearts content. And if you've figured out how to do to it without a jailbroken phone, we'd love to hear about it.
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