WordPress WPtouch iPhone Theme not showing up in list of Themes

Don't be fooled by the name, the WPtouch iPhone Theme is a WordPress plugin, not a theme. So make sure you've added it here: wp-content/plugins/wptouch/. I made this same mistake and am more then happy to pass along the tidbit at my own expense.

Side note: the plugin does not change your default theme. It simply uses the iPhone theme for mobile users, something i was concerned with when I first considered using it.