MegaPhone used to be iPhoneDrive. MegaPhone 1.5, from Ecamm Network, finally lets you edit notes. There is a large caveat which is that it seems to need to reboot your iPhone or touch every time you edit an individual note. That's pretty inconvenient should you need to edit lots of notes. Each time you edit a note, prepare to wait 30 seconds or so while your device reboots.
Editing notes and pasting content from your Mac does work and that's the main thing for now. One interesting little extra. As soon as you are done editing notes or adding them by dragging or by using the copy to iPod (or iPhone) command, you can eject your iPhone or touch and you've got your new and newly edited notes with you.
The content you paste in will retain its font, color and style information. This means you can see color and different fonts and such in your iPhone or iPod touch notes.
You can copy PDF, RTF, RTFD and Word documents in as individual notes. Graphics will not make it over, RTFD and PDFs convert to RTF minus any graphics. I'm good with that. Graphics would be nice but that's not essential.