A Macworld report, with evidence from Engadget, today briefly details a bug found in the iOS clock app that reportedly prevents non-recurring alarms from properly activating on New Years day.
I was able to confirm this after a couple of false starts. For the bug to show itself, your iOS device must actually tick over from 11:59 p.m. on December 31, 2010 to 12:00 a.m. on January 1, 2011.
The good news is that there is a work around. Apparently, for now, users should set up their alarm as a recurring event. Otherwise, alarms may not go off when scheduled or expected.
In any case, be aware of the potential issues if you use your iPhone as your alarm clock.