I have two schools of thought on this topic.
For point and shoot tasks, the iPhone has completely replaced my old P&S camera. The image quality of the 4S is good enough for that kind of shooting, the video is absolutely amazing, and the small size and the fact that it just so happens to be attached to my phone make it a no-brainer.
But for creative work, I still use my DLSR because of the additional features and control it offers me. I enjoy doing a lot of night photography, which just isn't possible with the iPhone; not even the 4S. Plus the ability to change lenses for different purposes with a DSLR is just not possible with an iPhone. Plus the iPhone won't work with my programmable intervelometer
Each have their uses, but the iPhone is definitely a solid point and shoot.