The last 2 videos I uploaded to Vimeo I used the AppleTV preset codec to export (A friend recommended it). When I posted my vimeo videos to Facebook, my friends who watch via their iphones weren't able to watch those videos. So is this a codec issue? Vimeo or Iphone? A combination of all?

Vimeo has ideal settings for upload in their FAQ. I have alwaysed use these settings. I have watched my videos on Vimeo both through the browser on my iPhone and through the Vimeo App. The link is what is ideal for Vimeo but I have also just uploaded HD.mov files and it works just fine.

Compression guidelines on Vimeo (http://vimeo.com/help/compression)

Jason I believe you need to be a plus member and have the 'mobile version' enabled in order to play them on iPhones.