I emailed HTC and asked let the know I thought the 720p recording was very poor, they wrote back and said in low lighting conditions it would look grainy (which it does in all lighting conditions) and that moving it too fast would cause jerkiness (which it does when you move very slowly) but that they would try to make it do better through future software updates.
When I initially wrote to them I let them know the frame rate was too low and things didn't look smooth enough, that there was too much compression and it was all grainy and that it jerked badly when the camera was moved at all and that was how they responded.
I saw that it was offically supposed to be recording at 24 fps but it seems a lot lower than that, 30 should be an ideal frame rate for a phone I would think. I know some will say "it's a phone camera get over it" but they are the ones that kept touting the 720p recording as a reason you wouldn't need a camcorder anymore, so it's no wonder people are disappointed with the lack of quality of the video capture on this phone.