I think we have two separate issues here. First of all, the guy in question is a jerk. Or at least he is behaving as one. There is a difference between offering constructive and helpful ideas and trying to make someone feel small and denegrating them.
The other issue is that there is a broad continuum of audio quality. You can invest more time and money into production and get better and better results. Depends on your goal and what you want your stuff to sound like.
I think your tone is pretty good. The playing is real solid. You seem to have your own vocal approach that is unique and well controlled. So if I were to say anything, I would offer suggestions for running a line-in to the camera. There are some lower cost cameras now that have external mic access which means they can also accept a line in from a board. Another option is to capture audio separately via a mixing board directly onto a PC, and marry the audio and video in a tool like Sony VEGAS.
What kind of mic are you using?
There ARE now stero mics designed specifically for the iPod. Coming up with a better original signal may be the fastest way to make incremental improvements. There are a lot of options.
It all depends on how polished you want to be. I WILL say your playing and singing are at that level where I would not feel guilty about investing a bit more in production. You've got a lot of skills and some good stuff going on. If you want to add more polish, I can connect you with a few guys who can really be helpful. Without being jerks.