While it may not pack the power of Final Cut Pro, Nexvio’s ReelDirector does allow you to do what seemed impossible just a short time ago: Edit video on your iPhone and share it with friends and family.

Thanks to Apple bringing video recording to the iPhone 3GS, users can now shoot quick movies on the go and even do basic trimming to focus on just the material they want. But thanks to a $7.99 app called ReelDirector, you can do that and a whole lot more, especially now that the clever app has hit version 2.

ReelDirector 2 adds the ability to do multi-track sound editing and mixing, use still photos in addition to video and even do a Ken Burns effect (limited to a simple zoom-in, but still an impressive feature for a cell phone app). iPhone editors can also adjust the length of opening and closing titles and even automatically flip any clips that may have been imported upside-down.

According to TUAW.com, ReelDirector works well, and finished videos can be e-mailed (within limitations) or save them to your camera roll for later export. But ReelDirector can’t do everything, mainly due to limits imposed by Apple’s iPhone SDK. The biggest among them is the inability to use your iPod music for background sound. The best workaround so far is to record your music through the iPhone’s microphone.

While ReelDirector is probably best compared to iMovie rather than Final Cut Pro, the ability to edit quick videos and share them with loved ones without ever touching a computer is still quite remarkable. Nexvio’s developers have upped the ante with version 2 and continue to work on user-requested features for future releases.