I would recommend iUI, which is based on the code originally developed by Joe Hewitt - the creator of Firebug.
I have developed a pretty advanced iPhone webapp with it (online food diary searching while you type). The only thing was that I had to disable page transitioning emulating sliding screens, as the animation was quite slow and unpleasant.
Since then, Apple added support for proprietary CSS extensions providing access to "native" animations, but due to the availability of native SDK, I don't think it is widely used and on a first glance this is not supported in iUI.
For reading and reference I would recommend Apple's Developer Connection topic http://developer.apple.com/safari/library/referencelibrary/G..., which provides several "entry" points to documentation, guides, and samples. Still, for development it makes a lot of sense to save efforts and build on top of an existing library, such as iUI, which provides you the app structure, pre-built JavaScript for iPhone-specific manipulations, and images.
I would be careful with iWebKit since it seems to use GPL, which may result in issues with non-open source use.