It appears that Web-apps can be stored locally under the forthcoming iPhone OS 2.0. The new OS iteration will include support for the client-side database API, which is part of the HTML 5 spec. Apple says this functionality goes "well-beyond cookies" and has robust support for offline data usage.
Apple says that properly designed with the client-side database API can be "totally functional even with the network disconnected."
The version of Safari included with iPhone OS 2.0 will also include a full-screen mode in Safari. This means that Web apps can be displayed without the Safari address bar and other elements. With an appropriate meta tag, a Web app launched from the home screen can automatically be launched in full-screen mode.
As previously reported, the iPhone SDK (software development kit) made available yesterday includes a new version of Dashcode (v. 2.0 Beta ) that allows creation of Web apps for the iPhone. When you click run, these Web apps launch in the Aspen Simulator. The tool also has support for bundling home icon images into the deployed Web app.