As a huge OneNote fan, I'm always happy to see my notebooks accessible in more and more places. It might even prompt some folks to update the OS on their devices, as it requires the iOS 4.2 upgrade (which is just a software upgrade, this should work on an iPhone 3 as well).
The Windows Live blog has an announcement in Connecting Office 2010 to the web and phone, and you can see CNET's coverage on Microsoft's OneNote Mobile arrives on the iPhone.
All I'm getting is Login Error:400. And if you look at the details in the app store so are a lot of other people. Looks like they didn't do a thorough test before releasing it.
@iphone user, sorry to hear that.
Daniel Escapa posted about this on blogs.msdn.com/.../onenote-mobile-for-iphone-re-quot-loading-list-of-notebooks-failed-400-quot-error.aspx, I'll keep an eye on his blog to see how this develops.