Safari HTML Reference: Supported Attributes says:
contenteditable
If true, the element can be edited on the fly; if false, it cannot.
Availability
Available in Safari 1.2 and later. Available in iPhone OS 1.0 and later.
However, on my iPhone, I can't get it to work. Anyone have success with this?
You can try it with this document (admittedly not pure html, but that document works in desktop Safari, and Chrome and Firefox 3). I haven't been able to get even the simplest html document to be editable in mobile Safari.
contenteditable has been added to iOS 5 beta 2, according to one of the developer videos from WWDC 2011. I suggest signing up to Apple's Safari developer program and downloading that video from the WWDC videos page.
If you sign up to be a Safari dev, you also gain the privilege to submit your Website to their online iOS Web app gallery.
Edit: I've confirmed this works on my iPad running iOS 5.0.1. Try it out here: http://www.quirksmode.org/dom/execCommand/