Per Robert Scoble, Silveroffice, Inc. launched a word processor application for the iPhone at gOffice.com (iPhone Link). The web-based application allows you to type into a text field which you can save to a Word document and send it to yourself or to others.
The application offers some addition features, including special headers, text templates, a cursive signature font and live previews. According to a video interview with the CEO, you will be able to upload your own text templates in the next week or so. The application is free, but they do offer a service to print your document and mail it anywhere in the world for $3.