I'm using Spanning Sync to achieve this integration between Google Calendar and iPhone , as suggested in this article.
http://spanningsync.com/ says: Spanning Sync 3 is the one app that syncs both iCal with Google Calendar and (Mac) Address Book with Google Contacts. It gives you even better control over how your information syncs, and is now up to 10x faster!
Two-Way Sync between Gcal & iPhone
It can be done, and I've tested it! These instructions are for an iCal-enabled computer (specifically a Mac). It does require:
- MobileMe ($70 if you get it with a new iPhone, $100 otherwise; or $120/150 for a family plan, for 5 people) - this syncs your iPhone to iCal
- Spanning Sync - syncs your Google Calendar(s) to iCal
I suspect Google will eventually come up with an iPhone App to replace Spanning Sync, but MobileMe will most certainly be an essential part of the equation.