Originally posted here, Hanwang.com.cn has developed a handwriting recognition app for the iPhone.
Still in beta, Latin and Chinese characters are both recognized, and the input is currently done with the finger. Of course you could also use the Pogo Stylus or TapRight as well, if you're more of a stylus folk.
Currently, the only way to get HWPen is to add iphonecake.com/src/all as a source in your Installer and grab it from there. I have emailed them to see if they'd like it hosted on our Community Source and Cydia as well, so hopefully you'll see it there as well soon.
Note: this is a beta version, so backup your /System/Library/LaunchDaemons/com.apple.SpringBoard.plist before you go! just in case...