I thought this temperature warning screen—which says "iPhone needs to cool down before you can use it"—was a funny fake. Turns out it's completely real:
This message appears when the operating temperature has become too hot. This is a safety mechanism that protects the components of your iPhone 3G. If this message appears, you should turn iPhone 3G off, move it to a cooler environment, and allow it to cool before resuming use.
Note: When this message appears, iPhone 3G may still be able to make emergency calls.
Some conditions and activities that may activate the Temperature warning message:
Leaving iPhone 3G in a car on a hot day.
Leaving it in direct sunlight for extended amounts of time.
Using certain applications in hot conditions or direct sunlight for long periods of time, such as GPS tracking in a car on a sunny day or listening to music while in direct sunlight.
That's from Apple's Support web pages, and that screen is what someone called Jeff got last week. He was sitting next to a pool in Scottsdale, Arizona.
His fix: "I put the iphone between two cold beers and it worked!"