is the iPhone capable of downloading such content as music vids from iTunes via PC?
Yes, you do it inside itunes once you connect the iPhone. When the special iPhone subsection pops up on the left hand column, select the “Music” tab. There’s a checkbox to send music videos to the iPhone. [it might be under the “Video” tab]
I think you would be able to plug it in to your usb port and download it through iTunes just like with a regular iPod.