A panoramic view of the 5th Ave. Apple Store in New York City.
The iPhone's camera has been one of its least regarded features. The built-in camera is only 2.1 megapixels, performs poorly in low-light, and has a very limited field of view.
All of that being said, you can pour through Flickr's global tag of iPhone and, sort by Most Interesting, and find some photos that you will be amazed that they were taken with an iPhone. I know I have quite a number of photos that I've taken with my iPhone that I've been pleasantly surprised by.
The three problems I mentioned are not easily fixed. The fact that the iPhone is only 2.1 megapixels is, as far as I know, impossible to change until Apple releases an updated iPhone. The iPhone's low-light performance can sort of be rectified by, well, changing the level of the light with either a flash, a light, or perhaps positioning your subjects nearer to a light source like the light shining through a window.
The field of view, however, is something that many are trying to rectify. Heck, my iPhone macro lens (video) is an example of trying to change the field of view on the iPhone. There are also lenses that are being released by real third-party accessory manufacturers. But, you can also tackle this problem with software.
Pano, from Debacle Software, is an iPhone application that allows you to shoot four consecutive photos which it will then merge together as one large panoramic photo. The best feature of Pano is not just that you can do this but how you do this. As you are shooting Pano shows you the right-most section of the previous photo so that you are able to line up each shot with the last.