+1  A: 

If you are scaling by the same amount in the x and y directions, then your projection is causing the distortion.

Just a hunch, but maybe try swapping the 320 and 480 in your Ortho projection. (In case the X and Y on the iPhone is swapped)

geofftnz
Wow! That was the answer, thank you very much. Everything works now!
Don't Forget to accept his post AJ.
Goz
I would, but I can't see how to do that at the moment. Maybe there is a minimum time limit or I can't because I'm not registered. I will check back later anyway.