The company that produces Palm OS emulators for Windows Mobile, StyleTap, has proof that they're working on a Palm emulator for the iPhone. The emulator allows users to run Palm OS applications on the iPhone. It's still in the experimental stage and there is no public beta planned, but this video clearly shows that they've got something going.
StyleTap says this is "not a product, nor is its presence here a commitment of any kind, express or implied, that StyleTap Inc. will ever release an official version of StyleTap CrossPlatform for Apple iPhone or iPod touch."
Looks like this is just for kicks at this point. The big question is, who would want to run a Palm OS application on an iPhone anyway?