If you're talking about using the iphone on a flat, horizontal
surface, and moving the touch/iphone in any combination of the four
cardinal direction, I don't see how that'd be possible given the
hardware these devices are limited to ===>
http://en.wikipedia.org/wiki/Iphone#Hardware.
You'd need to have some sort of sensor like a mouse has (i.e. a laser-
photoreceptor setup).
I'd say your best luck is with the accelerometer setting built into
RemotePad :)