And it does this replacing the original photos on the phone? Is it iTunes or iPhoto that's responsible for the deleting of the original photos? I'm not sure if Lightroom has the ability to remove images from the roll on the phone.

All my camera imports go into an incoming folder that gets a date-based folder hierarchy automatically created/applied and maintained by Lightroom. I'm not sure I'd be able to use that other Lightroom publish tip to keep the photos in sync back to the iPhone with this layout.