This is really awesome. While there are rumors that an iPhone 4 Steadicam is in production, Spencer Watson didn't wait -- as you can see above, he went ahead and built a Steadicam-type rig for his own iPhone out of some parts he had sitting around. As you can see from the video it takes, it works pretty well. While you probably wouldn't want to use it in place of a professional rig (the iPhone isn't really meant for high-motion video, and it looks like he's applied some other stabilization filters), it definitely looks better than if the iPhone was on its own.
You can pick up some of the parts he used in his online store, but it all looks pretty easy to put together. All together, he says it was about $40 of parts from Home Depot or a skate store, and I'm betting it's about a weekend of work. Very cool.