iPhone ecosystem not quite geotagging ready
The iPhone 3G is correctly geocoding photos, but unfortunately there are a lot of applications that are losing the EXIF-GPS information as the photo is sent or manipulated.
In particular, emailing the photo from the iPhone loses the EXIF-GPS, and using iPhoto mangles the EXIF-GPS. Also be aware that (at least version 2.2) of the Mac Flickr Uploadr will lose EXIF-GPS if you use it to resize your photo before uploading.
See the Geotagging Flickr thread iPhone 3G geotagging for more information.
UPDATE 2009-06-27: These issues have pretty much been fixed by newer operating system and software versions.
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