Cali Lewis over at Geekbrief.tv recounts how iPhone App Store developer Juviwhale (who previously spoke to TiPb about his work on MagicPad) met up with a college student named Zac White at Dev Camp, who turned MagicPad's localized cut/copy/paste functionality into cross-application gold with the open-source OpenClip framework:

Apple forbids applications from running in the background because it would take up too much of the iPhone’s resources. Also, developers are not allowed to create plug-ins that make their apps work with other apps on the iPhone. Zac White’s Open Clip framework uses a shared space on the iPhone. Any application that includes Open Clip can then access the common area and write to it, and read from it, thereby enabling copy and paste between participating apps.

Bottom line, it looks like any developer can add OpenClip, and instantly gain access to the shared cut/copy/paste pool. (Two of the apps demonstrated, sing a similar slide-up set of buttons to the proof-of-concept David Friedman showed off a few weeks back)

If this doesn't get Joz to bump official support up the list... it may not even matter soon.

(So long as auto-correction plays nicely with this implementation?)