They sued in 2009, but it was only in 2010 that an Australian tribunal ruled that the "i" prefix could not be an Apple trademark. And that only applies in Australia.
Now, did iFone choose their name based on the positive connotations associated with Apple? I doubt it. And looking at their website, it's about as far removed from Apple as possible.
I see no reason to doubt it. There are exceptions but "i" prefix anything generally is trying to cash in on the association. Whether Apple deserves to be the only company that can use "i" prefix is another matter (I would say no).
This is simply another case where Apple will end up writing a big check. They did it for iPad in China, iPhone from Cisco, the swiss clock thing a couple months ago, etc. Again the difference is Apple users aren't crying about how broken the world is because they have to write a check for walking all over some other companies IP.
Today, it would be another matter. Today, a new product named iSomething is most likely trying to piggy back on Apple's coolness factor.
8000 BC - 1998: no "i" branding.
1999: Apple release the first in a string of hit products under the "i" branding.
early 2000's to present: many other technology companies and products use "i" branding.
2004: in a completely unrelated development, a Mexican company names itself iFone.
I guess the "i" branding is a natural extension of "e" branding that followed from email. Anyway like I said I dont think Apple should have exclusive rights to "i" branding for various reasons, the biggest of which is that it doesn't seem like they've attempted to defend it against hundreds of other products using it.