Rejoice iPhone Gmailers, for Google has yet again bestowed goodness upon us! According to the Official Gmail Blog (via iPhone in Canada):

manually configure IMAP using the "Other" menu option by following the instructions this video [...] From then on, the iPhone's little trashcan icon will archive your mail. You might notice that messages you archive on your phone are actually being added to a new "Deleted Messages" label in your Gmail account -- but they're right in "All Mail" and searchable, just the way you want them.

If you're a hardcore Gmail user, let us know what you think of this, and how it's working for you!