I just finished building an iPhone webapp using Sencha Touch. The JamJockey app (www.jamjockey.com), allows users to search for any song and stream it right from the Safari web browser. Along with instant streaming, the app also incorporates album coverart for a nice look, and has a functioning playlist and favorites list so it's actually useful!
Thanks to HTML 5, the audio playback is fully integrated with the iPhone's native controls, so background audio and headphone controls work like a native app!
Sencha touch was amazing to work with, this app came out better than I had dreamed. It runs very smoothly, you'll quickly forget you're in a web browser.
Give it a try and let me know what you think! Just visit www.jamjockey.com on your iPhone.
Send a shout to firstname.lastname@example.org with any feedback.