Because Growl is installed on your Mac and Prowl on your iPhone, the requisite link between the two means there is some configuration involved in getting going with Prowl. You can't download Prowl onto your iPhone or iPod touch and be ready to go immediately.
To use Prowl you must first have Growl installed and then create an account at the Prowl website. An account is necessary for the Prowl plug-in on your Mac to know where to send the notifications. Once the client application is installed on your iPhone and configured it is simply a matter of setting your Growl notification style to use "Prowl" rather than your default. More detailed installation/configuration instructions can be found here.
Prowl immediately begins working and any notifications that appear from Growl are automatically forwarded on to your iPhone. You can configure Prowl to use a different notification style for notices that appear on your Mac. It is also possible to have Prowl only forward notices of a specified priority. Prowl even lets you decide when to keep the notices on your Mac, when to send them to your iPhone or when to have them them show up on both.
This works by configuring the option to "Only send to Prowl when computer is idle for more than X minutes." By using this option you can tell Prowl that after X minutes of inactivity it should begin forwarding notifications to your iPhone. While the computer is still active, however, it will use the local notification style. Leaving this option un-checked means that all notices will appear on your Mac and your iPhone or iPod touch.
In my testing I found that Prowl worked exactly as planned and the notifications appeared on my iPhone very quickly. When my iPhone had been in standby for about 20 minutes, there was a 3-second delay between the actual event and the notification appearing on my iPhone -- not bad at all. When I was actively using my iPhone the notifications arrived almost instantaneously. For example, downloading the latest release of redsn0w with Transmission, I heard the familiar sound-effect of my torrent download completing, and before the "ting" had ended my iPhone was vibrating with a new Prowl notification.
I was extremely impressed with Prowl and the elegance with which I was able to view Growl notifications on my iPhone. If you are already using Growl then this application is an easy $2.99US purchase.
Growl is also common with individuals running their own closet servers -- if this is you then Prowl is a must-buy. For example, you could have Growl notifications on your closet server show up on the office Mac and also forwarded to your iPhone when you're away from home.
Prowl is written by Zachary West, who is also one of the developers of the beloved, multi-platform chat client Adium. Prowl is a great application, and I am extremely pleased with the results I had in my testing.