Previously, Apple had announced an iFrame format. It's 960x540 and results in a picture that's higher quality than SD, but lower than 720p (1280x720). Several videocameras were introduced that included iFrame. The benefit was that, upon importing, it was a format iMovie didn't have to have a long re-compression phase before you could start editing with it.
I haven't seen anything new related to 720p posted anywhere. My assumption is that it's iFrame at a higher resolution, but I haven't imported any video shot with 720p normal and iFrame 720p in order to compare the files.
Just tried recording a quick video on my iPhone for comparison. My thinking was that the iFrame 720p content's data rate (if it's like the 540p variant) should be very high, higher even than 1080p. The results prove that out.
iFrame at 720p - 40.58 Mbit/s
1080p (native) - 21.96 Mbit/s
And the iFrame at 720p content scrubs very smoothly compared to the 1080p content. A better test for later will be to record content on the iPad 2 (as it's video is capped at 720p either way) and compare those results.