Detect if iPhone screen is on/off

You can use Darwin notifications, to listen for the events. I'm not 100% sure, but it looks to me, from running on a jailbroken iOS 5.0.1 iPhone 4, that one of these events might be what you need:

com.apple.iokit.hid.displayStatus
com.apple.springboard.hasBlankedScreen
com.apple.springboard.lockstate

Note: according to the poster's comments to a similar question I answered here, this should work on a non-jailbroken phone, too.

To use this, register for the event like this (this registers for just one event, but if that doesn't work for you, try the other two):

CFNotificationCenterAddObserver(CFNotificationCenterGetDarwinNotifyCenter(), //center
                                NULL, // observer
                                displayStatusChanged, // callback
                                CFSTR("com.apple.iokit.hid.displayStatus"), // event name
                                NULL, // object
                                CFNotificationSuspensionBehaviorDeliverImmediately);

where displayStatusChanged is your event callback:

static void displayStatusChanged(CFNotificationCenterRef center, void *observer, CFStringRef name, const void *object, CFDictionaryRef userInfo) {
    NSLog(@"event received!");
    // you might try inspecting the `userInfo` dictionary, to see 
    //  if it contains any useful info
    if (userInfo != nil) {
        CFShow(userInfo);
    }
}

I believe the events I listed above get triggered when the screen is both turned on and off, locked and unlocked. You may need to track the state yourself. Also,

com.apple.springboard.lockcomplete
<

Try this workaround. Author claims that it works well on 4.2

I have checked it on iOS 3.1 (iPhone 3G) - works well.

update: Doesn't work on iOS 5 beta 7 (iPod Touch 4G) :-(

update2: app go to background when screen locked, thus solution is kinda working on iOS 5 beta 7 :-)