I didn't find this feature listed anywhere. Just stumbled upon this by accident. With earbuds connected, launch Camera App, and set to video. Then just hit the play button on the earbuds to start recording. Press again to stop.
It's auto-magic!
This was introduced last year with the 3GS (3.0). I was taking some photos last years and I wanted to listen to music, so I pressed play on the mic and it began to record video. This is one those easter egg find of the iPhone.
Is there any way to use the earbuds to take still shot? Double click perhaps? I would find that very useful, as I would prefer a physical button to the on-screen one.
Have to try this with my bluetooth headset later today. Being that it works with the play button. Then technically it should work with a bluetooth headset. If so this would really be handy.