The more I think about it, the more strange it seems that Apple DIDN’T include handwriting recognition from the start for iPhone. Although I guess it would have detracted from the ‘use your thumbs!’ interface of the device to have a stylus.
Anyway, one Chinese developer wouldn’t stand for it, and has developed their own handwriting recognition app for the iPhone, supporting both Chinese and Western alphabets.
HWPen is in beta, and you have to have unlocked your iPhone to run it, as it needs the Installer.app application. If that’s you and you fancy a go, head here (and then come back to tell us what you think).
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