For the advanced option, what if we took the same approach that Hushmail uses, where encryption is done in either client side javascript or a full java/flash app (although I dislike having to run plugins just to access your wallet)? That would probably be a better option for the truly paranoid (which I admit I am one myself)... 
No Java or flash on the iPhone/iPad's (which is really your target market), that and the Android (which has java and flash). Not that Java/Adobe are known for great security. There are just so many reports on CERT (http://search.us-cert.gov/) of Java and Adobe vulnerabilities.
Right, if you could do it in javascript, preferably (Wallet API or something similar) you could theoretically do it on any browser. The paranoid among us could peruse the javascript to verify that passphrases are never sent across the wire.