Just thought I would add that there are now two versions of iPhone VM and I have found the initial (first version) to be not very stable - specifically, certain games will deadlock (load for a while then freeze or go to a back screen) when iPhone VM is installed.
However a second version, iPhone VM 2 is available on the same repo source and it uses a dynamic swap file instead of the fixed 256MB swap file of the first one, and I have found this second version very stable.