Am I late to the party on this? I didn't see any other threads.. My iPhone 4 plays 1080p video files just fine. When browsing home sharing, I can see all my home videos that I imported into iTunes. Many of them are encoded as 16Mbps AVC H264 1080p files. They stream to the iPhone just fine. I don't see any 1080p Movies or TV shows though.... home sharing only shows the 1080p home videos. I first noticed this when my kids were playing 1080p home videos on their iPod touch (4th gen), so it plays fine on that gen of iPods too. I'm assuming that if I set the 1080p flag in subler on my home videos, that they would then disappear. Looks like restricting 1080p video on iPhone 4 and iPod touch is just a software limitation and not a hardware limitation.