Ah, my bad.
On both platforms, you have to open the Tag Reader app. However, on iPhone, when you open the app, it puts you in the camera viewfinder. All you have to do is hold a Tag in front of the screen and the camera will detect and scan it in realtime and take you to the destination URL.
On WP7, opening Tag Reader takes you to an instruction screen with a big Scan button. Pressing Scan takes you to the camera viewfinder, where you have to snap a picture of the tag. After you snap, it processes for a second or two and then tells you if it was successful scanning the tag. If not, it opens the viewfinder again. On top of this, every time the viewfinder opens anew, the autoflash is turned on.