1) Make sure you have an iPhone 3G. A regular iPhone or iPod touch will not work; you need the Assisted GPS capabilities of the iPhone 3G for this to work. If you don't, please stop reading. Go do something else...
2) If you're not already signed up on Geocaching.com, do it now. You don't need the Premium membership -- just sign up with a free account. It will let you see the latitude and longitude of the caches you're trying to find, which is an absolute necessity. If you want to find out more about geocaching, check out the Getting Started page on Geocaching.com
3) Search for a nearby cache. To do this from the home page of the Geocaching site, just enter a zip code or city, state, or country info (see right side of screenshot below).
4) After you enter your location information, Geocaching.com displays a list of nearby caches (below):
5) Click on one of the cache names. Now you get the info you'll need for your cache hunt:
6) If you're looking this up on your Mac, you might want to print it to PDF and then email it to yourself for easy reference once you're in the field! The Geocaching.com site is easily viewable on iPhone Safari, so you can cache on the go.
What you want to do now is enter that latitude / longitude information into Google Maps -- that's the app that you're going to use to get to your cache. It would be nice if Apple had built copy/paste into the iPhone 2.0 software so you could just drop that stuff into the proper slot in Google Maps, but noooooooo!
Type the lat/long into Google Maps in the Search field. You'll quickly find where the site is, and if you have your iPhone Location Services turned on you can see where YOU are. That's helpful in getting to the cache. If you ask for directions to a cache that's located off of a street (most are), you'll get driving directions to the closest point to the cache (see below):
7) I always like to zoom in as far as I possibly can so I can get a good idea of where the cache is hiding (see below). Once you've pinpointed the location, you just need to follow the hints to find exactly where the cache is. You may need to dig through bushes, poke under yucca, or slosh through mud to find the cache, but that's part of the fun of geocaching. In this case, the cache seems to be near a footbridge...
That's it! With your Assisted GPS turned on (make sure that Wi-Fi is on if you're in a heavily populated area), you'll get about as accurate a reading as you'll get with most of the GPS devices that you normally use for geocaching. When your "blue dot" (your current location) meets up with your "red dot" (the cache), it's time to turn off the phone and start using your eyes.
After you've found the cache, you can take a picture and/or report your find on Geocaching.com -- using your iPhone 3G, of course. If you're a current geocacher, let us know how you think your iPhone 3G works for caching, and if you get started with the hobby as a result of this post, have fun!