Its pretty decent video for a point-and-shoot still camera. About on Par with the iPhone4, which some folks have used to shoot a short film. But still not as good as a dedicated video camera, honestly, because of Canon's limitations to the Digic 4 processor.
With the DSLR 5D Mark III comes out, and brings with it the Digic V, you'll see the quality of still camera videos get better (it will eventually trickle down to consumer cameras as well after that). For now, you get a lot of aliasing and moire.
Better off with a consumer vid camera like the HV40, since the sensor doesn't have to skip lines to resolve video frames. Or a recent panasonic lumix camera (not so great at stills, superior to canon at video).