iPhone and iPod Touch homebrew developer ZodTTD has released a MAME arcade emulator for iPhone and iPod Touch devices running on firmware 2.x.
Called mame4iPhone, this app seems to be a port of Franxis' mame4all which, in turn, is based on MAME v3.07 Beta 5. Right now, it supports a whopping 2,000-plus games ranging from the 70s to the present, although it's worth noting that not every rom may work with mame4iPhone.
This version of mame4iPhone supports sound, but ZodTTD says it's disabled by default. To enable it, go to Now Playing, slide the slider for volume up from the off position then start a game.
If you have any feedback, drop the developer a line at the Source link below. A list of supported games is also available there. You can download mame4iPhone from ZodTTD's repository on Cydia.