The folks at Touch Arcade have found and posted a YouTube video showing an iPhone smoothly running World of Warcraft.

The report claims that the game is running via Vollee, a game streaming application that essentially enables 3G phones to play resource intensive games over a network. Vollee has demonstrated its capabilities in the past by facilitating Second Life on a mobile phone.

Vollee has recently announced a partnership with ActivisionBlizzard and has claimed intentions of supporting the iPhone, adding credibility to the video’s authenticity.

iPhone users have used hacks and work-arounds to play WOW on the device. Most notably, a user used a program called Telekinesis to stream WOW running from his PC to his iPhone, posting the near unplayable results on YouTube.

Update: CruchGear has a working video.

[Via iPhone Blog and Touch Arcade]