The App Store reviews are all for older versions, and the iPhone 4 failure reports were from just two people. A third person reported no problems with using it with an iPhone 4. There were some audio problems in earlier versions that could make it look like it just didn't work. I exchanged some e-mails with the developer several weeks ago about intermittent audio, and he was very responsive. 1.2.20 doesn't appear to have any problems.
It works perfectly with my 3G, but I don't have an iPhone 4, so I can't tell you for certain that it works. But, if you go directly to the developer's web site that I linked earlier, you can download the application and try it free for 21 days. Then you can see for yourself if it works for your needs, rather than relying on just the App Store reviews.