I recently had the chance to try out the Pogo Stylus from Ten One Design. It is one of few styli that is compatible with the iPhone and iPod touch. The design is quite simple—a small fuzzy tip and a small pen, about the length of the iPhone. It comes with a clip for keeping it with the iPhone, but it still seems quite inevitable that many will be lost.
I personally think the Pogo Stylus is a bit of a disgrace to the iPhone team at Apple. The concept of the phone revolves around touch, and using your fingers to control the phone. I understand the need for some to have a stylus for their phone, but I firmly believe the phone works better as it was designed to be used, with your fingers, and not with a stylus.
For those interested in the Pogo Stylus, it is available for $14.95 in three colors; black, gunmetal and silver.
Product [Pogo Stylus]