I really doubt that the delay has anything at all to do with the iPhone. It's generally not practical to move people from one massive engineering effort to another on a short term basis, especially when they are as distinct projects as a telephone and a computer operating system. While the two may have similarities at some level, they are different enough that I can't really see them sharing the same workforce with any realistic hope of getting anything done faster.

So, nah, I'm pessimistic on this one, and I don't think 10.5 is delayed because the engineers are working on the iPhone (which implies the iPhone will also be considerably delayed, btw).

Peace,
Drew