This app uses Live555 and FFMPEG to stream live video and audio to iphone via RTSP / RTP . Download the free app (link to iTunes at dropcam.com) to your iphone and view one of the public IP cameras, you'll see how smooth the live video is. I used Wireshark to sniff the packets from one of the cameras and was surprised to find the stream used RTP / RTSP / RTCP even noticed RTMPT - tunneled? protocol's all working fine on the iphone.
Does that mean that the iphone iOS supports RTSP stack but not mobileSafari?