By making a waterproof iPhone case, The Joy Factory has gone where most case makers fear to tread (or tread water, in this situation.) Just because you can make a waterproof case, doesn't mean you want to ship one, because you still need to make it foolproof enough that end users will seal it properly before they take the plunge. The $40 RainBallet from The Joy Factory addresses this through several smart decisions.
First, the RainBallet does NOT try to be a fully functional case while submerged. For example, you cannot access the volume, mute, or sleep buttons. You also cannot access the dock connector. These are all good and understandable tradeoffs. You cannot plug in waterproof headphones, whereas some competitors have tried that in the past. But it's hard to imagine how many people need or want that ability. There are simpler alternatives to listen to music while swimming.
The RainBallet is focused on letting you run apps, make phone calls, and take pictures. They have what they call the Intelli-filter™ which blocks water but not sound. The case is made out of a smokey plastic, but they have clear Sharpvue™ lenses to enable high-quality photos for both the front and rear cameras. There are rubber gaskets throughout that, when three dials are rotated, seal your iPhone 4 (Verizon or AT&T) in a tight, albeit a bit bulky enclosure. You can tighten or loosen those dials using a small coin. I recommend you practice a few times before you lock your expensive iPhone inside and hit the waves.
Because the buttons and ports are blocked, don't expect to keep your iPhone in the RainBallet indefinitely. It's really meant for single-purpose use, near and in water. Fortunately, the two-piece design (really one piece since the two pieces are connected permanently via a hinge) makes it fairly easy to swap your iPhone in and out. The Joy Factory even throws in a wriststrap which can connect right to the case... something Apple has not offered. If you're paranoid, as I am, you might want to also get a warranty from SquareTrade, as they actually cover water damage! I have a trip to Cancun planned, and I'll give it a more in-depth test!