google's unladen swallow targets LLVM, and apple is now sponsoring work on LLVM, which they might be using to target iPhone ... so it could become a reality in the near future :)
If Adobe can use LLVM to compile Actionscript for the iphone, then it seems very likely work could be done to get Python to compile to the iPhone as well.
That's not a compiler for Python. It's a compiler for a limited subset of Python that works via source to source translation targeting C++, you could write a version of it targeting Objective-C if you wanted.