You may want to edit video outside of the iPhone, then upload to Viddy. But when syncing video with the iPhone it goes into the Videos area not the camera roll. Viddy only allows us to upload from the camera roll.
To transfer the edited video to the camera roll, attach the video to an email and send this to yourself. When viewing the email on your iPhone, hold your finger on the video attachment and there is an option to save the video. This saves the video to the camera roll.
Then you can upload to Viddy.
* This works for me on an iPhone4 running iOS 5.0 your mileage may vary.