Just wanted to report on a breakthrough in my iPhone-CV digging. I found a true realtime frame grabber for the iPhone preview frame (15fps of ~400x300 video), and successfully integrated this video feed with a pure C++ implementation of the MeanShift tracking algorithm. The whole setup runs at realtime, under a few constraints of course, and gives nice results.
Update: Apple officially supports camera video pixel buffers in iOS 4.x using AVFoundation, here's sample code from Apple developer.
So lets dig in...