Coverflow provides one of the most visually appealing elements in the iPhone GUI repertoire. It's the view that you see when rifling through albums in the iPod application while holding the device in landscape orientation. Although Apple has included a full working implementation of their technology in the iPhone's UIKit library, it's not part of the official SDK. (You can find sample code for using the unpublished Coverflow API over at Google Code). These unpublished APIs are not App Store friendly and they may break at any time.
A number of developers have looked at Coverflow, and provided their own implementation libraries. Coverflow basically consists of some core animation for the movement between covers, geometric transforms to create the right perspectives, gesture interpretation for selecting or swiping through the covers, and a bit of finessing between artistic presentation and deceleration algorithms to make it all look and feel just right.
If you're looking for an App Store friendly Coverflow implementation and don't really care for Apple's rather clunky "Covert Flow" (sic) sample code, head on over to Plausible Labs, Landon Fuller's shop. His team has dropped the indie dev licensing fee to $50 for PLJukebox licensing. PLJukebox represents one of the nicest third party Coverflow libraries out there. It's so nice that Apple rejected Fuller's Peeps app back in the days when they were a lot crankier during App review. It looked and performed like the UIKit version.
As a final note, the fees for PLJukebox help underwrite other Plausible Labs projects like the open source PLBlocks project, which introduces programmatic blocks (it's a programming abstraction similar to lambda expressions) into Objective-C and PLCrashReporter, which provides enhanced crash reports from iPhone and Mac OS X apps. You might also want to investigate the open source OpenFlow project, which is hosted at github.
If you have any questions about any of these projects or want to learn about corporate licensing, contact Fuller directly via his websites.