It has been called for, for quite some time. Users wanted a way for them to be able to take pictures of the screen of the phone, from the phone itself.

Well, its available via the iPhones operating system (2.0) by pressing the Home & Sleep/Wake buttons together. The screen of the phone will then briefly flash and whatever was onscreen at that moment, will be saved to the Camera Roll.

This feature can also apparently be enabled on 1.1.4 through the use of a .plist file.