The saying is that the best camera is the one that you have on you, and I feel like the iPhone is a very good fall back camera. Granted it's not yet ready to be the camera that I take to Whitecaps games or the one I want to pull out when I need a really good optical zoom. However I think it can capture the events of day to day quite well.
I'd definitely hold up the picture above, taken at the Night Market with my iPhone, with anything that I've taken with an slr or dslr there. The fact that it's small, not too conspicuous and always on me makes it actually fairly great.