Best guess is the two resolutions don't match. Check that.
More specifically, based on your explanation, the camera is probably DV at 720X480, or maybe the smaller HD at 1280X720 while the iPhone is 1920X1080.
You have two basic choices. Context click on the larger footage and select "Scale to Frame Size" or better yet, click on the footage and go to the Effect Controls panel and use the Motion effect's Scale parameter to scale it down.
You may choose to scale it exactly, or you may decide to leave it a little larger if that frames the picture better. It depends on the footage. I often find that I want to focus the viewer's attention on the better part of the larger frame. I can do this better if I edit in a smaller frame. Once again, it depends on the footage as well as the distribution method.