Assuming approximately 8MB worth of uncompressed raw data from the image sensor, 20 frames per second would require writing images to flash storage at 160MB/sec, which no iPhone can do.
But writing to RAM (at 3200+MB/s) is certainly possible. You could cache around 2-3 seconds (on lower-end iPhones) as you compress. Again, the idea wouldn't be that you could indefinitely do this, but merely that the compressor would be deferred (and would lag at a ratio that would still yield x FPS).
That's how I would do it. But apparently they already do this :)
That's how it's done, where on dual core devices, a JPEG encode can be done in parallel to capture.
Try it on an iPhone 5 with "infinite shutter" disabled and you will see the dropped frames in the filenames once you import them to your machine from iTunes App File Sharing (or over SSH if you're jailbroken).
