John Carmack, that guy who gave us the revelatory Wolfenstein 3D seems enamoured with the iPhone, and goes as far to say the iPhone is on par with the PlayStation 2 and Xbox in some ways. That's some mighty gaming friends. In fact he says that if the market supported it, he could easily drop $10 million developing a game for the iPhone.
That might just be a little premature, but things look good for the future of the iPhone as a gaming platform.
In the meantime I'll go back to playing Labyrinth on my shiny new iPhone 3G.