Peel is trying to change the way you channel surf, by sidestepping the concept of channels altogether. How are they accomplishing that feat? By releasing an iPhone app/hardware accessory combo that turns the smartphone into a universal remote.
The Peel app on the iPhone is designed to help you figure out what's on TV, not by giving you a list of channels in a timetable, but rather by figuring out what types of shows you watch the most, then presenting the most relevant, available options to you when you're trying to find something new to watch.
As for the part where it turns your iPhone into a universal remote, Peel actually did something kinda clever to avoid having to attach a dongle to your iPhone. See that yellowish thing in the picture? Yeah, that thing. They call that the Fruit. The iPhone talks to a cable which plugs into your home router, and then the cable relays your commands to the Fruit.
They may have taken the whole metaphor thing one step too far into reality, but it was designed by Yves Behar (the Jawbone dude) and it's what allows your iPhone to control all your home theater devices, including TVs, DVD and Blu-ray players, Tivos, Apple TVs and Roku boxes. So that's cool.