Since the jailbreak is due very soon, I have created SpringFlash, the first iPhone 4 only Cydia app. SpringFlash is a springboard activator based LED flashlight for your iPhone 4. In short, you can have a touch of a button for a bright LED flashlight without hassling with unlocking your iPhone, closing your app, or even turning on your screen.
To use this, jailbreak, install it, go to settings app, activator pane, pick the activation method of your choice, and select the Flashlight. I am using short hold power, myself. It works very well.
Like all apps I write, this is free to jailbreakers in Cydia.