You can use Pastebud on both the iPhone and the iPod Touch. The devices don't need to be jailbroken.
Interestingly, for Jed Schmidt, Pastebud's developer, this is actually more of a side project, as his main interest is in machine translation. He is a freelance Japanese translator by trade and Pastebud is his first major software release.
How Does it Work
Safari to Mail, Safari to Safari
Now, you can either copy the text directly into Safari by pressing the Mail icon in the toolbar, or you can browse to any other paste and open the 'paste' bookmark to copy the contents of the clipboard into any web form.
Mail to Safari, Mail to Mail
Of course, you can't use bookmarks in Mail, but once again, Pastebud's developers found an decent enough solution around this, though it is a bit cumbersome. To copy and paste from email, you have to forward the email to a private email address at pastebud, which will then return a link to your email's text on Pastebud's servers. This link will then take you to a web page, where you can now copy and paste any part of the message just as we described before.
Given that the clipboard lives on Pastebud's servers, we were obviously concerned about the potential privacy risks. Except for when you copy from Safari to Mail, Pastebud's servers are, after all, involved in every step of the copy and paste procedure. Acording to Jed Schmidt, however, all clipboards are deleted within five minutes and email addresses are not stored on the server at all. Pastebud is also considering to offer additional paid privacy features in the future.
Of course, this is only a workaround and it would be great if Apple provided iPhone users with a native solution. Until that happens, however, Pastebud is still the only working copy and paste solution for the iPhone.
It clearly has its limitations, as it only works between Safari and Mail, but it does solve a problem for a lot of users and it does so well. A $5 subscription to the service will remove the nag screen that regularly appears when you paste text, but we think this is well worth the money.