Step 1: Download YouTube to iPhone software. Install and launch it.
Step 2: Download YouTube Videos and save YouTube flv to your personal computer:

Step 3: Convert YouTube flv videos to iPhone compatible video:
Click
to input YouTube video file to be convertered (batch convertsion supported, you can add as many YouTube files as you want).
Profiles option, you can choose what kind of video formats you want to convert YouTube to:
iPhone (480x320) H.264 Movie(.mp4)
iPhone (480x320) MPEG-4 Movie(.mp4)

Then click the folder button, select the destination folder where you want the converted iPhone video files to be stored.

Click
button to start converting YouTube to iPhone.
Step 4: Just use iTunes to transfer all converted videos to your iPhone, and enjoy it any where.
Run iTunes first, Click "Add File to Library..." to add converted files to iTunes library, then directly drag files from Library on to your iPhone.

Ok! We have finished the whole process to convert YouTube to iPhone now.