It's official: your older video iPod can duplicate many of the features of Apple TV, but the iPhone specifically cannot. There is no capacity for outputting video, via Apple dock, cable or third-party accessory. This means that the iPhone will not be a direct competitor to the Apple TV (good news for Apple, perhaps). It also means that any videos you may have bought a second time or encoded again at higher resolution may have been in vain. And so are your chances of ever bringing movies to your vacation rental, weekend home or friend's house to watch via iPhone.
When you queue up a movie or TV show in the video iPod, you see the options "TV on" and "TV off". If you select "TV on", your iPod screen goes blank and the program starts up on TV. There's a dock with S-Video output, and a cable that you can plug directly into a video output with composite video, plus stereo sound.
It may not come as a surprise that you can't plug in the cable: Apple has notoriously depressed the headphone jack so that only headphones with super slim jacks will fit. But even connected via 30-pin to Apple's own dock and a 3rd party Memorex iFlip, the outcome is the same. There is no option of "TV on," at the start of video play or buried deep within the menus. Thank God the iPhone has a spacious screen, cuz that's all your ever gonna watch it's videos on, ever.
iPhone with Apple cable:
Cable doesn't even fit:
iPod with cable: