According to Redmond Pie, the installation process seems very straight-forward. User feedback seems positive, except for the obvious battery drain of constantly running video. The app does appear to be a little much for past iPhone models which run on half the flash memory of the iPhone 4.
Considering the mixed reports on the iPhone 4's battery life, inevitably gluttonous live wallpaper might not be the best idea. But we also believe it's about time the iPhone got a taste of this wallpaper eye-candy.
If you feel like installing vWallpaper on your iPhone, you simply need to add "http://i.danstaface.net/deb" as a source in Cydia, and then look for "vWallpaper" if you're running OS 4, or "vWallpaper for OS3", if you are still stuck with OS 3, obviously.
source: Redmond Pie