I just got the definitive word on the algorithm that the iPhone uses to encrypt Keychain items and it's Triple-DES. I was flabbergasted that they didn't go with AES since a) there's hardware acceleration for AES-128 on the 3G and AES-256 on the 3GS; b) the Keychain APIs are wildly different from the Mac OS X ones; and c) Triple-DES has been deprecated for new secure applications for years now.