IPhone 4 + Gyroscope + Gaming = All Kinds Of Awesome [video]
techcrunch.com
techcrunch.com
That would be an accelerometer to you or me.
Edit: actually the combination of the two, I suppose.
Playing with the gyroscope myself, I realized there is actually a very comfortable degree of motion you can make holding the phone for added game input. I don't want to be spinning in circles trying to shoot bad guys, but some extra rotational movement is nice.
Also, for being an early game (maybe the first to adopt the gyroscope?) the spatial input was very intuitive, it took about 3 seconds to orient myself with the device and it was all blam-blam-blam from there.