I have set up a new iPhoneArt.com group - iPhone Cinema - for sharing videos, time-lapses, animations, slideshows, animated GIFs, etc. Please join and post your creations, however short or random.
There are quite a few apps that let you record video with various filters and effects, but only two, that I know of - CinemaFXV and GameUrVideo - that allow processing of clips from your library. "Timelapse" is the only app of its kind that can import pictures from your camera roll. With ReelDirector (and iMovie, I believe) you can zoom and pan over still images (the so-called Ken Burns effect).
Consider leaning your phone on something solid or pressing it up against a window for steady shots. You may need to use the "Rotate Video" app to do just that.
If you're not a musician, but still want to create your own soundtrack, consider downloading some of the free drum machines and synthesizers that are out there. Use a 1/8" Male to 1/8" Male audio cable to connect the output of your phone (headphone jack) to the input of your computer (line/mic jack) and record your performance/sequence directly to an audio program, such as Audacity or GarageBand. Sync the exported track in iTunes to make it available for use in a video editing app, such as Vimeo or ReelDirector.
If you decide to invest in a few music-making apps - be warned, they can get quite expensive - try sticking with apps that allow AudioCopy and AudioPaste whenever possible. This will allow you to easily share performances between apps. For the musical novice, I suggest NodeBeat for automatic rhythms and Loopy for audio loops (a la Reggie Watts). ThumbJam is fun, even if you can't play an instrument. And, if you're already familiar with digital audio and multitrack production, NanoStudio is a good option.