Images with vibrant purple colors in them look washed out and faded on the iPhone 4's screen. This effect happens with other colors too. Also, purples in Illustrator look almost blue on the phone. I should add that I don't really have this problem when viewing the images on an iPhone 3g.
EDIT: Has anyone else had a marked color difference between Illustrator/Photoshop and the iPhone 4?
Take care that 3G/3GS/4 doesnt have same display components and consequently not the same colors. Got 4 devices, lining them with brightness at maximum reveals impressive differences...
And even for one model there are variations depending I guess on production site/date...
I believe the iPhone 4's screen color profile is supposed to be standard sRGB, but in the end that doesn't mean much, as you've experienced.
You can easily get a constant live view of how your colors will look while you choose them via the free app LiveView. On your computer move the (free Mac or PC software) viewpoint over your mockup/drawing/whatever and you'll see that area mirrored on your device, giving you the ability to determine exactly what effect your adjustments are having.
Here's an excellent post on setting up correct color profiles in both Photoshop and Illustrator:
Setting up Photoshop for web and iOS development
Shift + CTRL + K opens colorsettings for displaycolors in photoshop.
Maybe you can adjust them to the same colorfeeling
