Gary, yeah, it does say on their website that it's for the iPad 2 only (in fine print in light gray font on a white background!). I haven't tried this accessory with the iPhone 4 yet, so I'm curious as to how it would use this accessory (video output only?).
http://store.apple.com/us/product/MC953ZM/A?fnode=MTc0MjU4NjE&mco=MjE1MDI5MjM
"Mirroring supported only by iPad 2."
Honestly, I think this is an ingenious move by Apple. It forces us iPad addicts to upgrade to take advantage of another cool, yet somewhat unnecessary (depending on your needs), add-on.
As a tech lover, I gotta admit, I was geekin' out pretty hard when I was able to play Infinity Blade and Tiny Wings on my 50" plasma TV. Playing Infinity Blade on a big TV really gives you the impression that you're playing a next-gen console. It's pretty impressive!
BTW, I'm curious to know if any of you tried my suggestion with your iPad 2s. Let me know if resetting your iPad 2s to factory settings actually helped.