Demoing iPhone apps during presentations is a bitch because Apple hasn't (yet) given us a way to mirror the screen like Steve Jobs does during his keynotes. The alternatives all suck to various degrees: use a camcorder, an Elmo (the projector, not the Muppet), or the iPhone Simulator. The iPhone Simulator is the easiest option and is fine unless you're trying to demo features only found on the device (like GPS, etc.) or make a demo video of your app being used in the field.
Although there isn't an Apple-sanctioned way of mirroring the screen via the Apple A/V cable (apart from for the iPod app), Rob Terrell shared some code a little while back that enables TV Out on a per-app basis based on Erica Sadun's discovery of an unpublished class in the MediaPlayer framework.
Rob's class worked like a charm (and still does, under 3.1), however The Evil Boss took it one step further today by releasing some code that displays touch indicators and rotation changes on the mirrored output. Watch his video, above, and read the full post, iPhone Video Output, for the details and to download the code that you can add to your app to enable this functionality.
Just make sure, however, that you don't accidentally submit your app to the App Store with this code enabled or it will probably mean a quick refusal.
Big thanks to both Rob Terrell and The Evil Boss for making this possible.
(PS. Apple, if you're listening, please, please, please enable the ability to mirror the iPhone's screen for any app in the next release. Just think of how much the quality of the demo videos for apps will improve and how much that will translate to increased sales. Oh, and why did you remove the private openURL:asPanel: method on UIApplication in 3.0? If we still had that we could actually demo apps that launch Safari for some bit of their functionality via this method.)
The Demo your iPhone apps via TV-Out article by Aral Balkan, unless otherwise expressly stated, is licensed under a Creative Commons Attribution-Noncommercial 2.0 UK: England License.

This is just what ive been looking for! Thanks a lot.
Incindently I re-discovered your blog after reading your “Adobe updater: die die die” again which i commented on months and months ago after being at the mercy of that damn adobe updater!
Very cool. I’m curious, though, does this mirror method show/allow accelerometer functionality (like Shake to clear?)
If there’s a good reason for leaving this important functionality out, then I don’t wanna hear it! I’ve been around apple since 1982 (born 1978), I hope this is just an overlook that will subsequently show up with the update software sometime soon, pleeaasse. How am I to explain to the radioshack guy that if I want to see my Ipod screen on the TV, I need to write an application!!?
P.S. Why isn’t this question answered in the Help app? Has apple been so busy making genius giant steps forward that they forgot to be there for the (stupid) silly guy like me?…. This shi(t) is awesome….