Tunemark Radio 1.5 is now available on iTunes. This update includes a new streaming music visualizer. While you are listening to a radio station, you can tap on the animated volume bar graphs to see a full screen animation that is affected by the music.
Here's a video demonstrating the visualizer
Given the iPhone limitations, it will never be as fancy as the visualizers you have on the desktop, but it's decent, and the performance is fairly smooth on actual hardware.
Tunemark Radio is an iPhone app which supports playing over 30,000 radio stations in the Shoutcast directory. It is available for FREE on iTunes and contains no banner advertising.
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