I did a few minutes of test video using the Nikon 35 1.8 and 70-200 VR2. As you can see in some of the videos there is a major jello effect when you are panning. When you are still and focused on a subject the quality seems to be really nice. The audio of course is lacking as its a built in mic with no inputs for using external mics.
The Autofocus seemed to be pretty responsive, it is not lighting fast but being the first Nikon to offer such a feature I think it did a great job with it. If i were to use this camera for VIDEO it would be on a tripod where it would not be panning. Keep in mind this is a $600 body, I think the video quality will be very usable as long as you know how to use it.
For a starter camera you get a lot of bang for your buck!!!