LifeHacker posted an article about the various ways one can use their iPhone to control their iTunes. One method that I really liked was by using an application called Signal.
Signal is a small application that you can download from here and it allows you to connect your iPhone to your iTunes library. It essentially sets up a web server that also runs some scripts to communicate with iTunes.
Once you’ve download and started up Signal it’ll tell you your local IP address and with that address you plug that into Safari on your iPhone. It’ll then display a well made and easy to use interface that you use to control your iTunes. You can queue up music to play or just go random! It’ll also display the album artwork on the iPhone which is really cool.
Currently Signal is shareware ($29.95 to unlock it) but you can download a demo version which puts in the text “Please register” after every 3 songs in your list.