The iPhone is being widely touted as the next big Gaming Thing. It is definitely true that the JesusPhone™ is a capable gaming device but if tests performed by Handheld Games are correct, the new iPod Touch is a much better performer.
The new iPod Touch 2G runs at 532MHz as opposed to the 412MHz of earlier models - including the iPhone 3G (the G's mean something different, don't worry about it) and Handheld Games suspect there may be undocumented differences in the GPU speeds as well.
After some experimentation, the four iterations of the device are ranked as follows: