Just came across this video editing app, did not see it posted here. Wonder if this app will be in the official froyo update.
http://zomgitscj.com/2011/02/08/zomgitscj-exclusive-full-fledged-video-editor-for-your-android-2-2-device/
http://zomgitscj.com/2011/02/08/zomgitscj-exclusive-full-fledged-video-editor-for-your-android-2-2-device/