When using 2.2 on the HTC Desire, select ISO 800 in the photo settings, rather than auto, then switch camera to video as normal. This will considerably reduce the flickering / stuttering during playback when recording at 720p.
Here's a video I've uploaded of the racing driver Anthony Davidson running a Formula Renault at Base Performance Simulations for a BBC piece on the importance of simulators in motor sport. I shot this sequence on the Desire and, while there are a couple of sticky bits, it's pretty good at 720p considering the light is low level.
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