Google Maps can generate traffic data? It's quite simple how it works.
When you turn on 'My Location' on your mobile phone, it sends data which includes your location and speed to Google's headquarters which then provides accurate traffic data on Google Maps. With the amount of people using Google Maps now, it also provides the traffic on local streets (major streets that is).
Google Maps for Mobile is free. The website is compatible with Android, BlackBerry, Java enabled phones, Windows Mobile, Palm OS, Symbian S60, and of course the iPhone.