Student developer Zac White has since taken matters in his own hands and founded a non-profit, open source, community project called OpenClip which is offering iPhone developers a free Copy and Paste framework that will add this functionality to their applications. This will allow users to copy and paste data between supported applications.
OpenClip accomplishes this feat while still following the rules of Apple's SDK. iPhone applications are allowed to read from other application's files but only write to their own. By creating a standard location for each application's "clipboard", applications can "copy" by simply saving data locally and "paste" by pulling the most recently saved data across all applications.
A demonstration of the OpenClip is shown in GeekBrief.tv video with early versions of Twittelator [App Store], WordPress [App Store], and MagicPad [App Store].