Tweet Reel is an iPhone 3GS application that was just released. While this is a paid program in the iTunes store for $2.99, it automates the linking of videos and pictures to your Twitter stream.
It will add a TweetReel URL link to your tweet with the description you give. I watched a bunch of them on the site (which you can do at anytime from any browser) and all the videos were great quality. They don’t stream, they have to totally buffer and load first, then they play.
The application got good reviews on Mashable, and people are starting to talk about it as stable and reliable. It uses oAuth for authentication to protect your security and automatically rotates pictures and video for proper viewing. Also, the 3GS is the only supported iPhone model.