It's a very smooth implementation. The phone acts as the referee. During the day phase of the game, it doesn't matter who holds it; anybody can enter the village concensus on who to lynch.
In the night phase, the phone gets passed around. When it's your turn, you unlock the screen with a brief password so that nobody else can see your role. Then you select your target (as a wolf or seer). If you're a villager, the phone asks you to guess who might be a werewolf. This doesn't affect who lives or dies, but it ensures that every player taps the screen on his turn. (Plus, bragging rights at the end of the game if it turns out you guessed right.)
Everything else, the app keeps track of for you. When the game is over, it displays a turn-by-turn narrative, which you can email to yourself or the other players.
iPhone Werewolf costs a dollar. Yes, this is a game you can play for free with a handful of straws or cards. But with the app, you don't need to designate someone as the moderator. And it eliminates the error-prone nighttime ritual, with the directives and the closed eyes and the humming and tapping or however you do it. And it's pretty, and it makes little howling noises. Comes with support for the werewolf, seer, protector, vigilante, and lover roles.
Plus, my face is in the app sample screenshot. So that's worth something. Check it out at Kory's web site, or search for "werewolf" in the iTunes App Store.