I've been using the iPhone 4s for a few months now and the first thing I wanted to do, was to take some decent photographs with it. I think the 4s is very capable. While I would not say that it's a substitute for a "real" camera - it works pretty well as long as you are set up correctly.
Here are a couple of shots created with the iPhone 4s. The color range is outstanding while the contrast is pretty good as well.
Here is a close up of one of the grape leaves that shows off some of the sharpness of the tiny lens on the iPhone. This image has a little tweaking to make the background a bit more out of focus, in the software by Nik called Snapseed. The colors are still rich and vibrant with good detail.
My set up: When I am serious about getting a good shot with my iPhone - I set the camera down and use a self-timer. (The app I like for the self-timer is Camera +) This app has a great little self-timer but also allows you to focus on the subject while taking a light reading from another part of the image.
Keeping the camera steady is the most important aspect of getting a sharp quality image. There are tripod mounts for your iPhone, but just leaning up against a rock can work wonders. With the self timer, you are not touching the camera during the instant that the shot is taken, thereby creating the sharpest image possible.
Sunset from the Marin Headlands.