Just a quick test of the Wordpress for iPhone app. Pretty slick so far. Seems like it's really easy to add photos to the post straight from the phone, but I'm not sure how to control where they will display. (The preview, which is quite nice, indicates the pics will be at the end of the post.)
So far, my only other complaint is that there are no tools to affect font style and hand typing tags is a bitch. (It also makes linking a real PITA.)
I like the idea of a Local Drafts vs Drafts on the server. Seems pretty easy to post a draft, and then touch it up on a desktop before publishing, if necessary. Let's see how well the phone app handles editing a draft on the server, if it's been modified after the phone app posted it. The answer is Not Bad. The pictures convert from being detached objects to urls to the now posted images... And if you add a pic to a draft, the same thing happens. Moving the location of the image is nigh-impossible on the phone (ok, now I really want copy n' paste), but is pretty easy to do online. It makes me glad that the WP admin interface got an overhaul.