iPhone for 65 year old grandma?

She'd be fine. My mom and dad are 62 and 61 respectively, and they both have smartphones and use tons of stuff on them. My mom has an iPhone 4S, my dad has an Evo 4G.

My grandfather, who is 86, has an iPhone 4, but he pretty much only uses it for calls and the weather forecast. He still struggles with the fact that his phone is on the internet. (Internet? What?) We have done a few facetime calls, though.

I'm 69 and love my 4s and my brand new iPad.

Have an 85 year old neighbor who loves her 4s.

old people absolutely LOVE the simplicity of Apple products. My parents (both 57) just got the iPhone 5 and are loving every minute of it. My Dad even has an iPad Mini he bought the other day and is his go-to gadget for browsing/reading/movies. Better late than never I suppose!

That all depends on the person, not their age I would say. Today's 65 year olds have been using all sort of digital technology for the most part. And then I know some much younger very intelligent folks who are technologically challenged simply because they have zero interest in that sort of thing.
My dad is now close to 70 and recently went Apple for both his desktop and phone. Since then I haven't received any late night calls about stuff that doesn't work. Actually, that is part of the reason I'm even here considering making the switch from my Windows-Thinkpad-Blackberry world.
And my dad is still running his own consulting business so he actually uses the stuff for real life applications and not just to mess around with random apps and such. Seems to be easy and effective enough.