Apple Insider took a closer look at the HTTP Streaming Media feature that was highlighted as part of iPhone 3.0, but hasn't received a whole lot of attention since:

The real benefit to HTTP Live Streaming is that the server can maintain multiple versions of the clips in different formats. This allows an iPhone user with a WiFi connection to negotiate a higher quality version of the video than if only EDGE were available. Even better, the phone can renegotiate a higher or lower quality dynamically if it improves or loses signal. This enables the watcher to experience the best video quality possible at the current bandwidth available, continually optimized as new segments are requested.

We saw this demoed by ESPN during the iPhone 3.0 Sneak Peak Event. Better still, Apple is proposing it as an open standard, platform and player neutral, which could spur adaption

Check out the full article linked above, and iphone.akamai.com for examples.