The beauty of the touch screen and layout of the iPhone / Touch has been that you can do what you need to with great success, just using your finger. The technology doesn’t see a pointed object touching the screen like a Palm or other touch screens do, it actually sees the conductance of your finger. So, a plastic tipped pen like you may have used before wont work.
Why do you need a stylus? Do you really need to carry a extra stylus ‘pen’ around with you. If you have longer fingernails (my wife), it helps a lot. And, if you do much drawing or photo manipulation (me), precision is improved using a stylus. General usage, no your finger is always with you and has a plenty small end.
The folks that do need a stylus though… will be happy to see that they can be gotten for less than 5 dollars and come in several fun colors. I put links with each color here to pages that show that particular color: Silver, Purple, Red, Black, blue all come with a pocket clip. Added ‘feature’ – if you own a new MacBook or MacBook Pro – you can use these on the notebook trackpads too. Handy if you have a sketching program to ‘draw’ a picture.