Kindle for iPhone* is a non-event.
From the beginning, the Kindle device was meant as a proof of concept for the Amazon platform (see "Kindle Kindle little star - take my Word" - 20071121**).
Amazon is into distribution, not hardware. Amazon v. Apple is more about coopetition than competition, Kindle v. iPhone more about complementalness than substitution.
Let's make both Jeff and Steve happy, and let's say you own both a Kindle and an iPhone : you don't carry your Kindle all the time, but now you are definitely more likely to purchase a new book, and if you can't wait you to have a peek, you can even read the first chapters on your way back home, before Whispersyncing it to your most comfortable reader.
I could bullpooh you for hours about other fascinating seamless user experiences, but I'll leave that to people who are paid for it.
Besides, Amazon is pushing hard Kindle the platform to set the standard, and the device comes only third after reach and speed. Even early adopters are feeling the pinch right now, so surfing on the iWave makes more sense to Bezos than waiting for the next Schumpeterian tsunami (if any).
And oh, within iPhone's reach, if your Kindle want to have a chat with your iPod Touch, that's perfectly okay, but they can't sing along yet (Kindle plays MP3, and poorly). Well, I guess neither of the two shopkeepers are minding right now...
This buddyship ain't no honeymoon, after all.
And who knows ? If tomorrow Apple happens to launch iRead for iReader...
* "Amazon Brings Kindle to iPhone" (20090404 PC World)
** and following episodes, including "Kindle 2 v. Print" (20090210). BTW, Amazon didn't go all the way in the fight for text-to-speech.