This guy has basically built an OS from scratch that can run on iPhones and supports iPhone apps without having to recompile them. Currently, only the base layer has been built so graphics/sound etc do not work but the goal is to emulate the entire iPhone OS.
It's based on the linux kernel and the Darwin OS which is the open source core of the Mac OS X.
Think of it as WINE project for iOS. He's building the libraries that iOS code depends on just like WINE recreated all the Windows DLLs so that Windows programs could run on Linux/OSX