Pretty sure this is coming in the Tango update. Can I ask why send a video over MMS instead of uploading straight to facebook/youtube/skydrive then sharing the link? Seems better in the long run, it gets backed up, you can share the link around easier, etc. And I assume MMS video compresses the video or reduces the quality somehow.
Ah then we can receive MMS but not send it ourselves till Tango. Maybe it's just a signal issue? I know I've tried to send regular pictures to people and it would error out twice, but then go through the third time. Did she use some kind of app to send the pic or just the regular messaging program? Could be a nonstandard codec as mentioned above.