I have been unimpressed by the small number of photos I've taken with my iPhone, only ever using it on the rare occasions I haven't had my Panasonic Lumix to hand. All the shots from my recent trip to New Zealand were Lumix shots: I just couldn't have captured the breathtaking scenery on my mobile phone.
Professional photographer Katherine Rose has put the new iPhone 4 camera to the test in an interesting gallery, where she compares shots with others taken on her Canon 5D (a £1000+ camera). See her shots here.
My conclusion: in the hands of a top photographer, who can get the potential out of the iPhone 4, it is much better than I had imagined.