There are plenty of word/spelling games to pick from on the iPhone, Words With Friends likely the most popular, but for some reason, the novelty of online Scrabble (and Scrabbleish) games wore off on me awhile ago, mostly because I feel like I never ended up playing all that many competitive games. Either I was wiping the floor with one half of the people I played or getting annihilated by the other 50% (cheaters, the whole lot of them).
For some reason, Letterpress, a newish app from one of the creators of Twitter, seems to be a little more enjoyable than its innumerable competitors. The design is super clean, every game is generally competitive, and it's fun to play in quick bursts of available time. Like nearly every other iPhone game I've downloaded in the past, I'll likely get distracted and forget I ever started playing Letterpress, but for now, I've enjoyed it enough to cough up the 99 cent full version, something I rarely do.
If you'd enjoy the opportunity to tell your friends that you beat the future editor of the Tucson Weekly in a semi-obscure iPhone game, feel free: my nickname on there is dangibson520.