As you probably know, the iPhone and iPod Touch make terrific video players--but they're limited in terms of the video formats they support. If you've got, say, Divx or MKV files you want to watch, you're out of luck unless you run them through a converter first--a time-consuming hassle, to say the least.
Last month, the VLC Media Player app for iPad enabled users to work around this limitation by playing virtually all video formats, no conversion required.
I'm happy to report that VLC just went universal, meaning it's now available for iPhone and iPod Touch as well. (Specifically, it's compatible with the iPhone 4, iPhone 3GS, and "recent" iPod Touches--which appears to mean third- and fourth-gen models.)
As with the iPad version, you copy videos to the app by way of iTunes' File Sharing feature: connect your device, click the Apps tab, scroll down to the File Sharing area, and then choose VLC. Click the Add button and find the video(s) you want to load up. They sync instantly (and quickly).
The app itself is pretty basic, offering little more than basic shuttle controls. It lacks a zoom-to-full-screen button like you find in most video players, but at least this updated version does allow you to delete videos right on your device, rather than having to manage them within iTunes.
I threw all kinds of videos at VLC, and it played each one without a hiccup. Your mileage may vary, especially with more obscure file formats, but I think it's a safe bet that if you want to watch a video--any video--on your late-model iPhone or Touch, this should do the trick.
Amazingly enough, VLC is free.