Orb Networks today announced a new service that streams live TV to the iPhone and iPod touch.

“TV on the iPhone is now real,” said Joe Costello, CEO of Orb Networks. “Steve Jobs may think that buying shows from iTunes is the same as watching TV, but iPhone users know better. When the NBA playoffs are on, you want to see the game, live, wherever you are. Free.”

To get around the iPhone’s extreme limitations on supported video formats, Orb created a special application, OrbLive, to enable the streaming of any video format to iPhones. Here’s a short demo video:

“Although the iPhone provides users with a great way to experience the web, it offers a ridiculously sub-par streaming video experience. When all the carriers’ free phones can stream lots of things that my iPhone can’t, something’s seriously wrong. OrbLive finally brings the iPhone’s streaming video experience up to par with other mobile phones.”

Orb’s service requires a jail-broken iPhone at this time.