I saw a version of VLC for the iPhone, but it requires a jail broken iPhone to work and Cydia. I have no idea whether there were issues making it available through the official channels or if they actually tried? A brief look suggests they might not have and probably to make it useful without hacks they would need to focus on retrieving files via an http source or a streaming protocol.
The best link I have is this:
http://www.zodttd.com/wiki/index.php/Vlc4iphone and the source is referenced in the page.
Maybe someone could work with what ZodTTD has done and add the necessary extra mile to make it work on a non-jail broken iPhone, and also see whether on principle Apple would accept it in the app store.
Providing logs, messages, configuration info (VLC, OS, Hardware) and a clear explanation of the issue always helps the problem solvers help you, even if they don't end up solving the issue. Just think what you would need if you were solving someone else's problem. Additional: Always looking for eager and capable MacOS X developers to join the VLC team - for more information
see here.