How To Install Tor On Apple Mobile Devices

Step 1: jailbreak your device. Use either JailbreakMe or PwnageTool / Red Sn0w. If you don't know which method to use, take a look at Jailbreak.Me for detailed informations.

Step 2: On your device, you now need to create the folder

/var/root/Media/Cydia/AutoInstall
and copy this deb into it. Take a look at the official Copying Files to/from Device instructions if you do not know how to do so.
If you want to install packages using the old command line method, instructions are here.
Remember: if you ever choose to enable SSH access, you have to change default passwords!

Step 3: Reboot your device.

Step 4: Open Cydia, refresh your sources and do an upgrade, to have all packages up to date.

Step 5: Install Tor Toggle.

Step 6: Add Tor to SBSettings menu.

Step 7: Toggle it!

Step 8: Configure your wireless network settings for Tor usage, go to:

Settings -> WiFi -> Your Wireless Network ESSID -> HTTP Proxy Manual
and set these parameter:
Server: 127.0.0.1
Port: 8118
Authentication: OFF
iOS SHOULD transparently proxying any traffic through the Tor network now. Be aware that many applications (like Mobile Mail) still leaks, though.
For any problems or suggestions, just drop me a mail.