Spotify have released a video of their iPhone app. Apparently a few reporters have been able to see the app in action as well. It will be available to all Spotify Premium users for free.
The key to the app is the that you will be able to play songs offline, so you can use the app at home, on the train and even on the underground with no connection.
http://www.spotify.com/blog/archives/2009/07/27/spotify-for-iphone/
http://www.guardian.co.uk/media/pda/2009/jul/27/spotify-digital-media
EDIT:
A more in-depth review:
http://sharemyplaylists.com/spotify-iphone-app-in-depth-review/
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