Yes they are (without jailbreaking, that is).
I really hate the APIs. I'm a developer, I've used them a fair bit and they are just
too restrictive. Sure, you can do some pretty amazing things like the games that have been demoed. In fact, you can absolutely brilliant things within the confines of your own application that sits on top of the iPhone API. However, it is really difficult to extend, modify and access many of the standard phone functionality and features.
There are more extensive and documented unofficial APIs for jail broken iPhones; i.e. don't even think about making something like IntelliScreen (
http://www.greghughes.net/rant/TopNotchAppForIPhoneIntelliScreenBetaReleased.aspx) - which is in my opinion a basic addon to any phone (extendable home-screen functionality).