kirk,
The iPhone's jack is recessed, which allows it to be insides the body of the iPhone, and incorporate shielding around it. No matter how well shielded a set of earphones is, the tip can not be shielded, and could pick up RF interference.
The jack is a mini-jack, and will accept standard headphones as long as they are narrow enough to fit. If the plastic "housing" around the plug is too wide, they won't fit.
Some of resolved this by whittling down the plastic on their headphones, but that is not something I would recommend because if you slip you could ruin the headphones. Use at your own risk.
Alternatively Belkin and Monster make adapters that are carried in the Apple Retail Stores as well as the Apple Store online.
Other companies make adapters that incorporate a microphone as well, for example Bose makes a kit that includes a Microphone.
Hope this helps,
Nathan C.