Does the iPhone compress emailed videos?
You are correct. The video will be compressed to a smaller size before sending out. 

EDIT: If you want to try to send uncompressed video, you can try the trick from this guy, http://www.quora.com/How-can-I-share-an-uncompressed-video-from-my-iPhone

In the Camera Roll or Photos app, press and hold on the photo. A menu should pop up with Copy as an option. If you want multiple photos, you can hit the Share button the toolbar and select all the photos you want and then hit Copy. Either way, you'll end up with the full-quality photo in your clipboard, which you can then paste into an email.