On May 6, 2010, planetbeing released a YouTube video showing the iPhone 3G running the Google Android operating system on an iPhone 3G.
It looks to still be a little buggy, and there are A LOT of limitations, such as not being able to communicate via phone.
He now seems to have more people helping him out with his project after getting it to work on a 2G (original) iPhone.
A lot of people got interested in the project after the release of his first video on April 21,2010, so his should hopefully help to get all of the functionality of Android on the iPhone 3G sooner rather than later!
If you want to find out more, visit http://linuxoniphone.blogspot.com for details and source code.