Do you know Clarence - Originally uploaded on flickr by stevegarfield.
Clarence told me that if you take a photo of someone with the iPhone, and add it to their page in your iPhone address book, it stays there even after you sync up your photos via iPhoto and delte the photos from the iPhone.
I just tried it.
He's right. The photo still remains in the contact record even though you've deleted everything from your 'camera roll' on the iPhone.
That's cool. I was under the impression that you had to send the photo back the iPhone the next time you synced iPhoto with your phone.