This little glitch has never happened to my iPhone, though I wish it had -- there's a glitch in the iPhone's camera that will occasionally cause it to slice up pictures like this, and our friend Veronica Belmont created a whole pool of the glitchy photos called iPhone cubism. Of course, if you want a picture of your little girl, it's more frustrating than anything else, but in an artistic sense, some of the pictures are really benefited by the random slicing. As if the iPhone didn't do enough, now it's throwing some art into the mix.
Of course, it's a bug, not a feature. Since several people are reporting this as a problem after 2.0 was released, we're guessing it's a software issue, perhaps a problem with syncing the little light sensor chip in the iPhone's camera. If you have some great pictures of this stuff, throw them into the pool on Flickr, and hopefully for the less artistic (and less bug-patient) among us, Apple will get this fixed soon.