The application currently I am using has a main functionality to scan QR/Bar codes continuously using Zxing library (http://code.google.com/p/zxing/). For continuous frame c
You see the same behaviour with the built-in iPhone Camera app. Switch between still and video capture modes and you'll notice that the default zoom level changes. You see a wider view in still mode, whereas video mode zooms in a bit.
My guess is that continuous video capture needs to use a smaller area of the camera sensor to work optimally. If it used the whole sensor perhaps the system couldn't sustain 30 fps. Using a smaller area of the sensor gives the effect of "zooming in" to the scene.