From a potential customer point of view, the idea is interesting, but I don't quite see that it would lead to an interesting game - and the video didn't really change my mind. It seems like at its base is a simple and quite slow game and each level some minor thing is different. It didn't look hard, or exciting. If it gets action packed or tricky in later levels maybe you could put one of those levels in the video.
"Is there a demo of Osmos I can try first?
Yes, but don’t let it fool you. The game starts gently, but there are some truly difficult levels later on in the full game."
http://www.hemispheregames.com/osmos/
That said, your point is well taken. I'll think if I can improve the video somehow, or perhaps have an Osmos-like disclaimer around it.
Also I just played "This Is The Only Level" as per waxpancake's comment. It's a fun flash game, but it still seemed fairly disposable. The thing your game has all over it is the graphics - but you haven't really given it any character - your dragon and princess don't say anything. A bit of humour and characterization goes a very long way in fun little iphone games.