The demo is modest -- a "360-degree panoramic tour of a sample virtual world location." Users control the camera with the phone's accelerometer. Apple recently threw down the gauntlet, saying that the iPhone and the iPod Touch platforms are "the best portable device for playing games." No reason that future can't include MMOs, right?
The iPhone client is scheduled to launch in Q1 of 2009. Does this mean that within months everyone on the New York subway, the Chicago El, and the London Underground will be immersed in a never-ending, time-sinking quest for teh phat lewtz?