After I wrote about iPhone settings, iPhone developer Mariano Abdala from Zerously contacted me with a really neat solution he used in one of his games. His free application Square War (iTunes Link) allows users to access settings by pinching the screen. This zooms out and turns the playing field into a preview for the changed settings:
This obviously only works for a very specific set of applications, and it requires users to read and understand the small text at the bottom, but I think for this specific application, it's a very clever and clean solution for exposing settings to the user.
If you require a short url to link to this article, please use http://ignco.de/213