Nope, that's exactly what happens. The 720p video files the iPhone shoots are huge (as in 80MB per minute) so the only practical way to e-mail them is to compress and scale them down first.

That answer tackles a question from a reader named Dave had about HD video:

Can you tell me how much space per minute is used to record HD video? Also, can you record in lower resolution?

The iPhone records its 720p HD video at around 10 megabits (Mbps) per second. That translates to about 80MB per minute, as we noted above, or a staggering 4.8GB per hour. (Hope you sprung for the 32GB model!)

As for recording in lower resolution, as we noted with Jake's question, if you use the front-facing camera, you can record at the same 640x480 resolution as the previous iPhone.