On this blog - Ask E.T. - Tufte discusses the pros and cons of the iPhone interface design and has even recorded a great video demonstrating what he thinks is right and wrong with the iPhone interface. Here's a quote from the posting and click on the image below to view the video.
The iPhone platform elegantly solves the design problem of small screens by greatly intensifying the information resolution of each displayed page. Small screens, as on traditional cell phones, show very little information per screen, which in turn leads to deep hierarchies of stacked-up thin information--too often leaving users with 'Where am I?' puzzles. Better to have users looking over material adjacent in space rather than stacked in time.