Brand new Google Reader for iPhone (and iPod Touch) 

Click on the image to zoom in
Pretty damn good, although I’m still getting the hang of it. Seems to have fixed most of the gripes I had with the previous Ajaxy version, but adds a pretty big usability issue: If you follow an external link (which opens a new “tab”), the whole page is refreshed when you return to Reader and you cannot go back to the item you were viewing.
Still, it appears to work just fine on S60 Webkit, which is a plus.