Just got an update to version "286u-7" via Cydia. Basically, this is a nice terminal for the iPhone that lets me do usual shell things, and the packages that come via Cydia make it very powerful. Full apt, for example. ssh, svn. (I can setup a tunnel to an internal JIRA server at 10gen so that I can use my iPhone browser...)
The UI is half-screen of keyboard, and half-screen of terminal window. What's interesting is seeing how they are learning how to leverage the touch features of the screen. A terminal using the iPhone kbd is a little challenging, especially w/ the small screen for those of us where glasses are required more and more :) so finding ways of incorporating graphics and touch will make this tool all the more useful.
They are using single-finger touch to bring up a neat "grid" menu, short and long single finger swipe, and two finger swipe. I'm still figuring it out, but what I know is nice. For example, short swipes up and down gets you the up/down command history in the shell, just like an up/down arrow would. Short swipe up to the "northeast" is a ctrl-c, to the "southwest" is tab. "west" is backspace, and "east" is space. Two-finger swipe up ("north") is the conf page, down is hide/show keyboard, "west" and "east" flip between the multiple terminal sessions. When you touch and hold, a square "menu" of buttons comes up, and sliding to them either does the function (e.g. "clear"), or changes the "menu" to a set of variants. For example, sliding to the "ls" button - which is darker to indicate that there are options there - switches the rest of the squares to variants : "ls -a", "ls -al", "ls -s" etc.
The results are pretty nice - if you have experience working in a shell, you can go pretty fast. I've only used it for a few things so far - ssh-ing into a server at work, or setting up a tunnel so that I can control a Hudson instance running inside our firewall. The iPhone is an incredibly powerful little computer, and having a good command line makes it more so. I wonder when Android will run on it? :)