The demo of the jQuery-based jQTouch Beta shows how an iPhone web app could have a visual look similar to that of a native app.
Yes, you'll never recreate Tweetie 2 with it, and it provides a lot of eye candy. The animation demos (page flip) are impressive. Web apps aren't as sexy as native apps, and they can allow you to "run" on multiple mobile devices, with pretty much the same server-side code.