In reply to Johnathan Lyman.

Intrigued by your comment, I too noticed that the iPhone app kept asking me to login to WordPress.com and no matter what I tried, it wouldn't work. After doing some research and even generating an application specific password, it still wouldn't work.

For the first time since updating the WP iPhone app, I logged out of WordPress.com, logged back in, used the keycode given to me by the Google Authenticator plugin and now, things like Stats work and the rest of the app works as well.

So if you're having problems, I'd try logging out of WordPress.com, and logging back in again using the Google Authenticator plugin and see if the app detects your connection to WP.com after validation.