A forum post to Chinese-language site weiphone.com (Translated Link) indicates that the iPhone 3GS is capable of playing back both 720p and 1080p video encoded in H.264 through the built-in video player, suggesting that Apple is currently placing arbitrary limits on the device, either to preserve battery life or keep its functionality more consistent with that of prior iPhone OS devices.
Using the free document storage and viewing application FileAid, forum member fridtear was able to circumvent Apple’s video restrictions, smoothly playing back files up to 30 Mbps in 1920×1080 resolution via the iPhone 3GS’ built-in video player.
While the effects on the device’s temperature and battery of playing back such large video files is unclear, these tests do appear to indicate that Apple would be able to open up the 3GS and any similarly-appointed future iPhone OS devices to playback of HD video files purchased from the iTunes Store, and potentially allow the devices to output HD-quality video via the Component AV Cable for iPod and iPhone.
