People have forever been wanting copy and paste on the iPhone/iPod Touch and I believe this is their answer.
The way it works is, you hover over the text you want to copy until the monocle pops up. You then drag your finger along the text highlighting it. After is has been highlighted, tap the 123 button on the keyboard and a copy and paste button will appear just about the keyboard. Click copy.
You can now paste this text on almost ANY application on the iPhone/iPod Touch that uses the keyboard.
You can get it off the iSpazio Cydia source (CLICK ME).