The iPod Touch's Safari browser shows Arabic characters as blocks.
I guess they couldn't afford the extra memory for the additional fonts for Safari "lite."
A
Unicode sample page highlights the other character sets left off of the "Safari-light" that's on the iPhone and Touch - Devangari (Hindi) and varietals (Tamil, Bengali, Gujrati), Arabic, Tibetan, Tagalog, Thai, and Hebrew, among others.