Silicon Alley Insider is reporting that a dedicated Hulu application is indeed on its way. An iPhone app should be here in just a few months.

Hulu has been busy denying the rumors that an iPhone version of Hulu was coming. SAI says the application will work over Wi-Fi and AT&T’s 3G network, meaning that users will be able to view programming anywhere with a fast data connection. The upcoming iPhone OS 3.0 software update, which lets developers bake streaming media into their applications. For Hulu, this means that the advertising could be stuck into the mobile stream and that users would be able to watch videos without leaving the application.

Users of Hulu can watch ad-supported, full-length television shows and movies on their personal computers for free, instead of paying Apple to download a copy for offline viewing. If such an app were available on the iPhone, it would also offer portable TV and movie watching, something not yet offered in Apple’s own mobile iTunes app, which is limited to video podcasts.

[via WebWare]