Friendly Multi-Factor Auth

The Twitter "hack" has had me thinking about authentication lately, as have conversations with Buzz and Kellan. I'm curious about user-friendly multi-factor auth, and want to try it out with Google Apps to see how it fares as a standard consumer experience. I couldn't find any hardware-based OTP solutions in the Enterprise Solutions Marketplace, just software—I'm specifically looking for hardware.

While digging this morning I came across the very-intriguing ('cause it cleverly pretends to be a single-key USB keyboard) Yubikey:

• RWW post
• Vimeo video showing gApps integration - extremely cool
• lots of hacker-friendly developer stuff

One use-case it doesn't address is if your device (say, a smartphone) doesn't have a USB port. How would you log into gApps from an iPhone?

Am curious for y'all's thoughts, experiences, annoyances, etc. with the Yubikey—I'm also listening on Twitter.