Is it possible to copy 'rich text' formatting on iPhone?
Text is copied in rich form in iOS 3+.
You can try it by copying some text in Safari and pasting it to Mail.  

But pasted text format will depend of the app. For example, the SimpleNote app only paste in plain text format, since the service doesn't not support image and text styling.

There is no native way to see the copied text in HTML form. You'll have to find an app to do that.