I've used iUI both with PhoneGap and directly with Cocoa and UIWebView
and it has worked well. (It's been over a year, though, and I'm not
sure what changes have been made to PhoneGap in that time -- there might
be some minor conflict you need adjust configuration or even handlers to
avoid.)
If you can provide a little more info on what your code looks like, I
might be able to help. To keep things simple you might want to try iUI
without any PhoneGap JavaScript libraries in your page and see what happens.
-- Sean