The following tutorial will enable you to move your downloaded Youtube videos on your iPhone to the camera roll app. This will give you complete video editing capabilities of iPhone 3GS with which you can trim and share your downloaded videos on your iPhone, and then sync them with your PC or Mac. You can also make it work with your iPhone 2G, 3G and iPod touch by first following the tutorial posted here on How-to: Enable iPhone 3GS Video Editing and Camera Roll in iPhone 3G, 2G and iPod touch before following the guide posted below.

Torrentula is a BitTorrent client for iPhone and iPod Touch which allows you to search and download torrents directly on your phone from some of the top Torrent trackers such as TPB (The Pirate Bay), Mininova, ExtremeNova, Demonoid, SeeQPod and SUMOTorrent.
Torrentula can be downloaded from Cydia for free. You will need to first jailbreak your iPhone before you can install it.