I have a 3GS. Tap the photo icons next to the status update field and you get two buttons, "take photo or video" and "choose from
library" where you can select a photo or video to upload. I've posted 3 videos successfully. Make sure you're in the news feed or profile page rather than photos.
Ah, my bad I was trying in photos. Dunno why now that I think about it. Cheers!!