Inspired by http://www.blogger.com/img/gl.link.gif comparing iPhone headphone adapters, I took a pair of scissors and a knife to my own headphones and fixed the problem. For those that are unaware of the problem here's the short version: iPhone has an almost normal female headphone plug, except that its a tad too deep to accommodate the mic. As a result, almost all "regular" headphones don't work. This has led to a whole industry of adapters, ranging from $5 to $10 that fix this problem. Turns out, a knife does the same. For free (as in beer). Results below:
Those are my JVC headphones, not iphone headphones. That little ring on the side is what I cut out. All you need is about a 1mm cut and that does the trick.
Do *not* blame me if you try this on your $200 Bose headphones and end up cutting the wire instead. I am not liable, YMMV, and all that.