I can't say I've used either (no iPhone), but when I was thinking about getting an iPhone I did some searching.
The two options seemed to be either ZodPlay or vlc4iphone.
The vlc4iphone page is here: http://vlc4iphone.blogspot.com/
And ZodPlay seems to have disappeared from download pages, but you can get it here: http://www.mediafire.com/?m3ymdzemulo (Apps.rar also contains vlc4iphone, but I'm not sure which version).
Sorry, can't offer support, but good luck!