We don't think it's fake; if it is, it's an unbelievably elaborate one and we'd prefer to think nobody is willing to put in that kind of time and effort for such a dumb prank. It's done using Vollee, which is used to stream games over 3G, so the video is actually just a stream and the rendering is done on the PC. But it's much smoother than we'd expect over 3G, and comes with enough features that true WoW addicts will be able to get their fix on the run, buying and selling elves or whatever happens in that game.
According to the comments left by the video's uploader, the game is completed but waiting for the rights issues to be ironed out between Blizzard and Apple (and, presumably, Vollee), so we have no idea when or for how much this might show up on iPhones near you. [Touch Arcade]