Seems that the WordPress for iPhone application has been updated.
Apparently they rewrote things, so it doesn’t come off as an update to the original WordPress app but as a totally separate app. Thus you have to manually go looking for it and manually download it, instead of just triggering an update.
Initial reviews aren’t that good either, with lots of problems out of the box.
I’ll upgrade, eventually. At least wait for 2.0.1 to come out, I guess.
Updated: WP’s official announcement.
Stuff From Hsoi 
I had a lot of problems with the older version. It got to the point where it wouldn’t log into my site. I’ll give the new version a show, but I’m not holding my breath.
I haven’t used the older version much, but the few times I did well… it was quirky and weird to use, but it worked. A couple times some posts got lost to the ether… not sure how that happened.
I do want to see if the new version will be better but, I’ll wait at least for 2.0.1, given the initial reviews that people are giving it.