I love Vimeo's video quality, but unlike YouTube, it doesn't make my uploads iPhone friendly. But that may change: they've already converted all "Staff Picks" and HD video showcases into iPhone and Android-friendly formats, and say there's more to come.
We've been working on it for the last few weeks. This is sort of the prelude of offering Plus members iPhone support; and in the future, an app. In the future, like the next several weeks—maybe longer, we'll be offering Plus users the option to transcode their videos to an iPhone version too."