The exploit which did affect Safari for both iPhone and PC was just patched in the Safari 3.1 update yesterday. It has not been fixed for the iPhone or iPod yet.
The exploit uses a webpage to run malicious code which freezes your iPhone causing you to loose any open and unsaved data. iPhoneWorld.ca indicates that they have tested the exploit with 1.1.4 but assume it to work with other firmware versions as well.
Apple will most likely repair this in the next firmware update. You can view the malicious code here.