The following is a concept video produced by LonelySandwich.com demonstrating cut and paste on the iPhone. It’s a feature that’s sorely lacking on the phone; it can do so much but without copy and paste it can never really be a 100% computer replacement (although for me it’s a 75% of the time laptop replacement.)
It’s a old mockup so I don’t think it will be coming soon, but the video itself is worth watching :-)
http://vimeo.com/moogaloop.swf?clip_id=266383&server=vimeo.com&fullscreen=1&show_title=1&show_byline=1&show_portrait=1&color=00ADEF
Thanks to Matt Milosavljevic for the tip.