Just thought I'd throw in my two cents.
I'd absolutely hate if word wrapping was introduced to mobile safari (I'd accept it as an option thats off by default but thats aside the point). I consider websites no different from any other form of art/design and I'd like to view it as intended. When I watch a movie I'd rather watch with black bars than have the image stretched and distorted to fit the entire screen. This situation isn't very different: there is no magic word wrapping algorithm that can work universally in all sites without being able to mess up/distort the design. It's definitely something to consider.
Adam
It's a balance between keeping the website looking as the designer intended, but also making it practically readable. For many people, the text on the iPhone is still too small to read comfortably and a way to make it bigger without having to scroll repeatedly left and right would be very welcome indeed. At least on Android devices I know that text wrapping can be turned on and off at will.