The iPhone specific version supports:
* Native iPhone-like story scrolling
* Mini permalink pages with top 5 comments
* Login and Digging
* Jump to any topic
Top Story listings are planned for a future update.
Rose notes that users can still browse the normal Digg website on their iPhone, but the web application is lighter and faster way to visit Digg and takes advantage of some of the iPhone’s user interface features.
I have no way of testing it, but certainly mobile specific clients do tend to work better than accessing the original page directly.
Digg for iPhone can be accessed at digg.com/iphone.