Applidium's VLC Media Player is now available on the iPhone and iPod touch, as well as the iPad, which it supported earlier. The new version is now 1.1.0.
VLC Media Player allows you to play a variety of video formats not supported natively by iOS. Remember, though, that it takes some powerful hardware for multimedia playback, and thus this app only supports the iPad, iPhone 4, iPhone 3GS and the last two generations of the iPod touch.
Here are the new version release notes:
This new version of VLC brings :
Runs on the iPhone 4, iPhone 3GS, and the recent iPod touches
You can now delete files from the application, without having to go through iTunes
Many more extensions are being recognized.
Much faster decoding thanks to assembly optimizations
It's free and open source and in the App Store here. You can watch a video hands-on below: