Photojojo has a solution. The iPhone Telephoto Lens screws onto an included iPhone case, allowing you to get up to 8x the normal amount of zoom. The lens fits in your pocket when you're not using it, so it's not like you're hauling around a huge accessory to go with your iPhone. Even better, the iPhone Telephoto Lens comes with a tripod. As most professional photographers will tell you, using a tripod is the single best way to improve your photographs.
The lens package is available for both the iPhone 3/3GS and iPhone 4. For US$35, you get the lens, a case and a tripod. It's a pretty good deal to help improve your iPhone pictures.