We've put in word to both Team17 and EA's mobile division (which was rumored to have acquired the license). EA got back to us to say that the company "does not comment on rumor and speculation." While we wait on Team17, you can head past the break and watch poor Harlequin catch a rocket to the face.
Update: We've spoken with a source at Team17 that has confirmed the video past the break is authentic and something the team produced in-house, choosing to sneakily unload it onto the 'nets, rather than send Joystiq a press release. Our contact said that Team17 has actually moved to self-publish games in the digital distribution space, so it no longer needs to rely on partners get its products out there. So, in short: Worms on the iPhone is real, Team17 is doing everything, and there isn't any planned release date as of right now.