According to the article in the Business Week, the upgrade to the iPhone operating system is going to change user experience with mobile video by utilizing HTTP adaptive streaming:

"HTTP streaming enables publishers to give users a better video experience by employing adaptive streaming techniques, something other players such as Microsoft (MSFT), Adobe Systems (ADBE), Move Networks, and Swarmcast already offer (though Adobe uses a more traditional proprietary real-time streaming protocol to do so, rather than sending chunks of video over standard HTTP like the others). That means that watchers can enjoy a continuous, smooth video experience. The stream intelligently adjusts to the highest quality a viewer can receive at each moment. If the connectivity worsens, a lower-quality stream is substituted without interruption or buffering. (For a more extensive explanation about adaptive streaming, see this subscription-only piece from GigaOM Pro.)"

Clip from "The Workshop"