The rumor was partly true, Bing is indeed coming to the iOS search party; however, it will not be the default option as was speculated in January.
During today's WWDC 2010 keynote address, Steve Jobs announced that Bing would be alongside Google and Yahoo as available search engine choices for MobileSafari. While it may seem insignificant, mobile search is a huge market that Google is currently dominating and it appears that Apple wants to put a little competition into the mix.
While he wasn't gratuitous with his praise, Steve did say that he was impressed by Microsoft's implementation of their search engine in the browser. And no matter what Steve thinks, this additional option is a huge win for the Bing team at Microsoft. And hopefully a huge win for us, too -- competition in the search race will help out consumers a lot in the long run.