According to this support document from Apple, iMovie for iPhone downsamples video—even HD video—before sharing it via YouTube, MMS, email, or MobileMe. The maximum resolution is 568 x 320, which provides better performance when uploading.
So, to get the best quality output, first export the video to the Camera Roll, and then import it to your computer using an application such as Image Capture or iPhoto.
Jeff Carlson | Never Enough Coffee Creations 