The Pandora personalized music service coming to the iPhone.

The company created an iPhone application that is for sale on the new iPhone App Store, which can be used to steam Pandora members’ existing online stations from all versions of the iPhone, as well as the iPod Touch.

This is Pandora’s second foray into mobile waters, the first being a partnership with wireless operators Sprint and AT&T. But while access to the Pandora service via those cooperators costs around $3 a month, the iPhone-compatible service is free. Any registered Pandora user can access all their stations directly from the iPhone just as if it were any other computer.

Pandora executives are positioning the iPhone app as a major new channel for advertisers. The company hopes to air both audio and video ads on the mobile phone by the end of the year.