In order to provide some relief for these issues, I have decided to start a project called Telesphoreo with the goal of creating a distribution of GNU and BSD's userspace for the iPhone as a collaborative, open-source project. The name is an ancient Greek word meaning "to bring fruit to perfection or maturity", which I feel is what needs to be done to Apple's product: it's passable as a phone, but as a portable workstation it is almost unmatched... with the right software.
For distribution, I have chosen Debian's APT, which I have ported to this new platform along with a few custom tweaks to integrate better with Apple's network settings. I have also spent the time to write a UIKit front-end to APT called Cydia, in order to make the transition easier for a larger number of users. (Cydia pomonella is the scientific name for the codling moth, which is what we often think of the as the stereotypical apple worm. I felt the name was fitting.)
You can try the Installer by adding http://apptapp.saurik.com/ as a source to Installer and install the package "Cydia Packager" from the "System" category.