It looks like the new iOS 5 media framework not only supports the rendering of 1080p video but also the export of video, upgrading from 720p to 1080p.
9to5mac is reporting that strings found in the AVAsset of iOS 5 shows the new video export option of 1920 x 1080 full HD preset. In earlier releases of iOS 5 the max export for third party apps was 720p. The feature will be available to all iOS models running the A4 chip, including iPhone 4, iPad 1 & 2, and the iPod Touch 4.
This latest revelation is also a clear indication that the next generation iPhone 5, and possibly new generations of iPod Touch and iPad as well, will receive the rumored 8-megapixel camera with 1080p video capture, as it would not make sense to support 1080p video export if you can’t shoot in the same format using the camera on your iPhone.