Capcom has announced that in early November an App Store near you will be graced with Capcom Arcade, featuring at launch arcade classics Street Fighter II, 1942, Commando, and Ghouls 'n' Ghosts. IGN has a positive writeup of a preview it played, saying that the touch-based controls worked fine but it was disappointed by the lack of online play or leaderboards. Capcom is promising these features in updates down the line, as well as an additional game every month.
Personally I find Ghouls 'n' Ghosts horrendously difficult with a proper joystick, let alone a touch interface. Still though, our own Mike Schramm was impressed by iPhone version of Street Fighter 4, and the games will offer the option of adjusted (read: easier) difficulty levels for iPhone play to reduce the number of expensive devices thrown against walls because of the first boss in GnG.
Anyway, touch screen controls aren't the clever bit. The clever bit is how you'll be paying for this slice of retro goodness. The app itself will be free, and come with a few tokens you can use to play the games a few times for free. If you run out, you can buy more tokens, or just wait because you'll get a few free ones each day. Eventually Capcom hopes you'll tire of the drip-feeding and pay out for unlimited play of one or more of the games, although exactly how much you'll be paying for this privilege it isn't letting on yet.