Aurora Feint: The Beginning is great, but AF2: The Arena is way better. (It's not free though...) AF2 has improved graphics, better actions using the tools, and the option to challenge other players.
I think they're judging in part by the amount of attention, downloads, and playing the games generated... of course, AF2 is better than AF, but it also just came out, and it has received surprisingly little attention. AF is unique in that it came out very early in the history of App Store games, was free, and was not backed by a major development house, and yet it really managed to set the standard for deep, attractive, high quality games on the iPhone.
Spore probably deserves mention primarily for being the first high-profile major release game to bow on the iPhone roughly in tandem with release on other platforms -- something that still happens
very infrequently at the end of 2008.
As for Sim City, I haven't played it, but it probably merits inclusion, especially considering that Rolando (and Sparta) made it on the list, and was approximately equally new.
It's an interesting statement that this list was able to span so well from free to $9.99, roughly the top price point at which games bow. And I think I've probably spent more time playing AF than I did playing any other iPhone game. Maybe as much as I spent playing Spore and Hero of Sparta combined.