What is vlc4iphone capable of? At the moment it may be limited by only a small handfull of decoders, but soon that list will grow! It currently allows you to drag and drop the following popular media formats onto your iPhone/iPod Touch for playback: MPEG / MPG,AVI,MP3.
The author is currently researching adding support for VCD, DivX, WMA and WMV, with support for FLAC and OGG formats coming "soon". The application is currently under beta testing but a public release is planned soon. The application requires a jailbroken phone for installation.