Around here, we used to call her "the unstoppable Erica Sadun" -- well, not to her face, but sometimes when she wasn't paying attention. The Queen of the iPhone Hackers has leveraged the undocumented video-out features in the iPhone 2.2 SDK, in cooperation with the clever folk at Freeverse Software, to produce the first playable demonstration of an iPhone game that displays on an external monitor. The one-off build of Moto Chaser plays best on a 2nd gen iPod touch (since it's got the fastest base hardware) and uses the device accelerometer for steering. On an HDTV, it outputs a respectable 20fps at 640x480.
Erica's post at Ars goes into the details of the work that Bruce Morrison and his team at Freeverse did to bring this custom build to rapid fruition, and it notes that this is in no way a product at this point; it's just a tech demo, although an impressive one. I had the opportunity to see this build in person earlier today at Freeverse's offices, and the surprising thing is how natural it seems to use the iPod touch as a game controller for big-screen play. With a less-intensive offering (a quiz or music guessing game would be ideal) and a design that takes advantage of the iPod's screen for simultaneous content display... well, I'd be game for that.
Video embedded in the 2nd half of the post. Check it out, and let us know what your dream game would be for a video-out setup from your iPhone or iPod touch.