The PSGroove / PSFreedom has been ported over to jailbroken iPhones but the interesting thing is that it isn't by the same team which MuscleNerd talked about. It's actually by a hacker who goes by the name of NTAuthority! and he has used OpeniBoot method which was previously used to port Android on iPhone 2G, 3G and iPod touch. The hack works on three iOS devices only for now, namely: iPod touch 1G, iPhone EDGE (the first iPhone) and the recently-outdated iPhone 3G. The device must, of course, be jailbroken.
Prerequisites for the hack includes: VMware Player, Ubuntu 10.04, OpeniBoot, WinSCP and OpenSSH. You can catch the guide posted here at PS3Mod. The mod can be seen in action in the videos embedded below:
More Info: Full Guide