I wonder if this functional failure is because the operating system for the iPhone 4 is too old or something similar. I recently also had difficulty with the phone because a commercial app - Blab - would not load on it due to the age of the OS in the phone.
What I did to get around the difficulty of uploading videos was to connect the iPhone to the PC using the cable and uploading the videos manually from inside YouTube. One irritation with this method however is that the upload date does not match the recording date - and the upload date is the date that is shown on the Video Manager screen.
But if anyone knows why the videos won't upload to YouTube from the phone, let me know please. I am starting to think it might be time to upgrade to a newer version of phone anyway. One problem with the iPhone 4 is the poor battery life. But anyway, suggestions are welcome.