I have Droid 2 and finally after a year figured out how to send Video from my phone. Open up a "send new text message" and hit the menu key. It should give you some options including "insert". Click on insert and more options open including Existing picture, New Picture, Existing audio, new audio, existing video, new video....
I click on the "new video" button and that opens the video recorder and allows me to make a video that Then automatically sends via text message. I usually type in my own number and send it to myself first and then forward to whoever I want after that. If anyone knows of a better way please share, but it works for me for now until I learn more
I can't seem to make it send existing video, unless its one I made previously in this manner, no matter how short it is.