LiveTimer works smoothly and responsively on your iPhone or iPod Touch and lets you Track your time as you work with a timer, or enter your hours by the day or week. Works on both Wi-Fi or the EDGE networks. You’ll have full access to LiveTimer’s time tracking features with our iPhone-optimized interface. A link to the main interface gives you immediate access to all of LiveTimer’s capabilities, including advanced reports, user and classification management, and more. An accurate, flexible and easy to use online time tracking service. Time can be tracked down to the minute to help you see the gaps in your day, allowing you to maximize your billable hours and efficiency.
Note: This app requires registration and costs $5 per user per month. Try with TestiPhone
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Another related app is Wrike. Project management tool with a time-tracking option.
I’ve been using TSheets.com’s time tracking tool on my iphone for a while now….impossible to beat as far as ease of use.