The video that is transmitted to the receiver (iPad) is not in HD until the record button is pressed and then picture crisps up to the 720p for a minute or two then it drops back into the grainy non-HD video. Until you press the red (even just to rec for 1 second) it goes back to the720p again. Is there a way to keep the video in 720p clarity the whole flight?

The Phantom always transmits the video in 720p.  It can not do otherwise.  What device are you using?  It may be the device is not powerful enough,  or you have too much stuff running in the background,  or you do not have hardware acceleration on.