I tried Pocket Legends for the iPhone a while back, and found it to be pretty interesting. It's a full 3D MMO inside the iPhone, where you create a character, equip it with weapons, and then jump in with a few other people to hack, slash, and cast your way through a dungeon. It could use a little polish (the particular dungeon I played wasn't exactly tuned for my difficulty level, and the people I played with weren't exactly forgiving), but if you're looking for this kind of cartoony MMO gameplay, Pocket Legends actually delivers quite well. And since it's completely free, there's not a huge investment barrier anyway.
And the game just recently got a big update, adding in an actual explorable world, a bunch of new quests and items to play with, and some optimization to the game engine that makes it a little more forgiving on older devices (but the game looks pretty good, given what it is, on the iPhone 4 already). It's available on the App Store for free right now for both iPhone and iPad -- what Spacetime Studios has done in implementing a full PC-style MMO on Apple's handheld device is impressive, and the new update makes it even moreso. If you've never given Pocket Legends a look, but can appreciate a solid MMO, definitely check it out.