The headset that comes with iPhone allows you to use squeeze (click) once to pause, and double-squeeze to skip a song. But if you squeeze one time (while a song is playing), the iPhone's playback will pause, and if you then double-squeeze, the iPhone will skip back to the beginning of the album or playlist (depending on what you started playing).
Thus it is possible to skip back to the beginning without pulling the iPhone out of your pocket.
[robg adds: This doesn't appear to be covered in the iPhone's user guide.]
Mac OS X Hints
http://hints.macworld.com/article.php?story=2007100723035310