The good news: Google Latitude—the Maps feature that finds your nearby friends on a map—is now available on the iPhone. The bad news: It's only available as a web application, so it doesn't currently work with the Google Maps app.
To try it out, just point your iPhone's browser to http://google.com/latitude and allow Safari to use your current location. Latitude will use your iPhone's GPS to locate you and add your location to Latitude's database. Assuming you've got friends using Latitude, when you tap on the See Map button, you'll see yourself and friends on a Google Map in Safari.
While it's very cool that iPhone users can join in the fun on Latitude, it is a bummer that it's not an integrated native application—either inside Google Maps proper or its own standalone app. (The same way that it's unfortunate that there's no native version of Gmail Mobile for the iPhone, despite the fact that Gmail Mobile in Safari is pretty solid.) Still, it works very well on the location front, and while I'm having a bit of a time adding friends successfully, it shows promise.
Google Latitude. Now for iPhone. [Google Mobile Blog]