A couple of weeks ago a Chinese developer released handwriting recognition software — for both Latin and Chinese alphabets — for jailbroken iPhones called HWPen. Similar to Graffiti, the classic writing software for Palm, you can setup HWPen from Installer.app.
I tried it, and while fun to play with, handwriting Latin characters is much slower than good old fashioned hunting and pecking on the iPhone keyboard. Now Chinese and other logographic writing systems are another story altogether. There are economies to be gained from drawing characters as opposed to tapping on them in a table.
Apparently Apple thinks so too.
According to a post at AppleInsider the latest private beta of Apple's upcoming iPhone Software v2.0 (build 5A258f) includes a handwriting recognition interface for the Chinese language. But it's not a port or purchase of HWPen. The Apple version works in both portrait and landscape modes and is only avaliable in Chinese (Traditional and Simplified) – sorry no english.