Taking a screenshot of your iPhone is one of the many nice little features that has been built into the 2.0 firmware update.
It can be useful for capturing something you need for later or in my case I have used it for taking a great quality photo of my iPhone that I uploaded to show how my webclip looks on the iPhone. (example here)
All you need to do is:
1. Hold down the Home button.
2. Whilst holding it down, press and release the Sleep/Wake button (on the top). The iPhone will click like it does when taking a photo and will then flash. Your screenshot has now been saved in the Cameraroll folder in your photos. Easy 🙂