I am looking for an iPhone app which streams TV channels over WiFi for free. Please suggest.
There is the Justin.tv app. It's not really for streaming shows, but there are some people there that do stream some shows. It's not really the most reliable source, but it's possible. As for the Hulu app, I haven't used it myself, but it could be nice if you're willing to pay the subscription fees that come with it.
There is a site iPhone.tvcatchup.com which let's you watch live tv, it has most freeview channels.
And there is the iPlayer BBC.co.uk/iplayer which let's you watch BBC programs. You can bookmark them and save them as an icon on the springboard. For the us there is a hulu app which I cannot comment on as I'm in the uk.