I am on an email list for Hammacher Schlemmer. I received an email from them today about "The iPhone Photo Printer"! LOL! Has anyone heard of or know anything about this?
I print to my Cannon i900D from my iPhone directly. The one you are referring to is actually a throw back to photo only printers from a decade ago that failed miserably because of Cannon and Epson making better over-all printers. These printers usually have some major issue with them either in cost to maintain or life span in general.
I don't think I would ever buy something like this to begin with. My sister inlaw has a printer similar to what you describe and she has her photos printed at a local camera shop... she saves alot of money in the long run.