iPhone firmware 1.1.2 is coming soon enough with the promise (among many other new features) of Chinese input methods.
But if you have a jail-broke 1.1.1 iPhone around, and you are looking for Chinese input method, you should check this out….
Disclaimer: I’m just point out the link. Do it at your own risk. Of course, you better can read / write Chinese as you follow the link. 😉