[hamfast]

OK. All you need to connect to your iPhone with Fugu is a wireless network.
Are you able to connect wirelessly to the internet with your mac computer?
If so, then your wireless network is working.
So, on your iphone you need to go to Settings/WiFi and choose your network.
If you're connected you will be able to push the little arrow on the right hand side of the screen to see your iPhones assigned IP address.

Now open Fugu. In the Connect to: put the IP address of your iPhone there.
The Username is always "alpine" (without the quotation marks).

Click connect.

Oh, you have installed SSH via Installer right?

You need this to communicate.