It's only available on the 3GS. There should be a little switch in the Camera app. For the 3G/2G, there are a few video apps available if you jailbreak.
If you jailbreak your iPhone you can use cycorder. It works great and you will be surprised at apple, that this is not standard on the phone.
http://www.iclarified.com/ is your friend. Wait a while before you do it though - there are quite a few programs that are out at the moment, wait for the best to be established.
has itunes got to be open??? as it tried to recover the fone but failed! me fones ok but just wanted to know! thanks peeps for your help!