The iPhone and Kindle both come with tiny power supplies that take in 120v AC and output around 5V at 0.85 to 1 amp. They seem to be too small and light to have a transformer, and generate very little heat. What is the electrical topology of these little power supplies?
This is not limited to these USB charger supplies. Most modern "wall wart" type power supplies are like this. They can be small because they are switchers. The line power is full wave rectified, then the result chopped at high frequency thru a transformer. The much higher frequency allows for a much smaller transformer to handle the same power. 5 Watts (5 V at 1 A) is easily doable in something that fits in the palm of your hand.
If you dig around, you can probably find a schematic for a small switcher like this. It is usually a full wave bridge, cap, and some sort of oscillator driving the primary of a small transformer at a few 100 kHz. The output of the transformer is rectified, filtered, and the result compared to the voltage setpoint. The over/under voltage indication is then transmitted back to the oscillator on the high voltage side via a opto-coupler.
The Apple iPhone charger is a switching power supply, complete with tiny flyback transformer. It works pretty much as Olin Lathrop described. It uses a L6565 controller chip that drives the switching MOSFET at (I believe) 70kHz. The Apple charger is more complex than the typical charger, using a quasi-resonant flyback topology. (The $2 chargers usually just use a ringing choke converter, and name-brand chargers use flyback topology.) I've posted a detailed teardown, explanation, and schematic of the Apple charger at http://www.arcfn.com/2012/05/apple-iphone-charger-teardown-quality.html
I don't think there are transformers in the mentioned "wall warts" or chargers (120vAC in to 5vDC out). A transformer steps up or steps down the SAME type voltage (ac OR dc, although almost always refers to ac). A converter CHANGES ac to dc. A transformer can step down 480vAC to 12vAC (example). A converter can change 120vAC to 5vDC (example).
They can be small because there are no transformers inside but a converter, or converter circuit.