Source: http://feeds.gawker.com/~r/lifehacker/full/~3/340014547/take-psychedelic-pictures-with-your-iphone
Wired's How-To Wiki demonstrates how to exploit the iPhone's unusual shutter to take distorted photographs. The trick? Just twist your camera as you're taking a picture.
The reason? The iPhone uses a CMOS sensor, which more or less "wipes" the shutter across the sensor like a scanner rather than the circular aperture of a traditional camera. The iPhone's CMOS scanner seems to be a bit slower than, say, the CMOS sensor on your Canon camera. Therefore, as the camera is recording the image, any changes over that small but significant amount of time are recorded.
Taking a psychedelic photo is actually just as easy as it sounds (works better in bright sunlight), but read on for a quick video demonstration.
Take Distorted and Psychedelic iPhone Photos [Wired How-To Wiki]