Yes, the data wont record with the sensor alone. You need either the phone, wristband or nano w/external pickup. I love my nike+ set up and find it very accurate (even more so than the treadmill, I dont hit pause when i stepp off for water breaks). I love the web sight and the way it keeps track of all your runs, distance, calories. You can even attach your runs to a map and catolog it.
The iphone works really well for the gym. You can keep the phone off your body while using the treadmill. As for outside running I perfer my nano w/external pickup setup for two reasons.
1. the iphone is larger and bulky to run with. I have larger arms so no armband holsters fit and waist clips are to large and anoying. I feel them the whole time im running.
2. the iphone water sensors are extreamly sensetive. I sweat quite abit while running and have waterloged my nano and ruined multiple sets of earphones. That much moisture will trip the iphone's water sensors in a heart beat and you'll be SOL come warranty repair time.
So all and all if your a serious runner stick with nano kit(for music) or the wristband kit(without music), but if your just joging on a tredmill (besure to dry off before handling you phone) or into walking outside the iphone nike+ is a great option.