Logically speaking, it shouldn't be a huge surprise. But a friend in the industry told us that they've seen H.264 1080P video playing on the iPhone, quite a few times, with no problems at all. Of course, the resolution is absurd overkill for the system's screen, but what's this mean in light of the purported iTunes 8 HD? Potentially a lot.

http://gizmodo.com/5045466/the-iphon...ideo-just-fine