There are a few ways to enlarge the text displayed on the iPhone. Each method is useful in different situations. You may already be aware of some of these options, but I’ll bet you don’t know all of them.

[Update – March 2018 – I wrote an an article in 2017 about how to make your iPhone easier to read which talks about how to use the Zoom and Larger Text features on current versions of iOS.]

• When viewing web pages using Safari or email messages, you can spread your fingers to enlarge the text size. The “Pinch Apart” gesture entails placing two fingers on the iPhone screen and then sliding them apart from each other. To reduce the size of text, you pinch your two fingers back together. For more details on how to execute these gestures check out this helpful web page on gestures.
  The next two options require an iPhone 3GS or newer.
• Turn on the Zoom function. You can enable this feature by opening the Settings app, selecting General, then Accessibility.  Finally, tap on Zoom and turn it on. Zoom magnifies the entire screen whenever you double-tap the screen with three fingers. Double-taping with three fingers a second time turns off the zoom function. You can move around the screen by pressing three fingers on the screen and dragging them around.
• Turn on the Larger Text function. You can enable this feature by opening the Settings app, selecting General, then Accessibility.  Finally, tap on Larger Text and select a text size. This feature makes text larger in the following applications:  Calendar, Contacts, Mail, Messages and Notes.

I should mention that the iPhone actually includes a great number of features that enhance usability and accessibility for people with limited vision, hearing or other impairments. Apple describes them all on their web site.