Turns out CBSSports.com isn’t offering all NCAA March Madness On Demand video for free this year. Online video remains completely ad supported but mobile is getting a new twist: a $4.99 iPhone/iTouch app with live streaming video and audio of all 63 games in the 2009 NCAA Division I Men’s Basketball Championship. The app developed by CBS (NYSE: CBS) Sports Mobile and MobiTV is optimized for Wi-Fi connections; it also includes real-time bracket and score updates, previews and more.

The Wi-Fi aspect sounds like it could limit the usefulness for people on the go but could make the iPhone or iTouch a nifty accessory for couch, bar or even at-the-game viewing. CBS promises in-game box scores and player stats “even as an overlay on top of the video.” (Gluttons can download full-length Final Four games from iTunes the day after they’re played for $1.99.)

I spent some time with the Turner-NBA All-Star live-streaming iPhone app from a suburban Chicago hotel ballroom and it’s fair to say it works best on Wi-Fi but was viewable on 3G. That app was 99 cents for one night live. It’s no way to watch a full game, though, if you have a TV option; if you don’t, it’s a better view than you’d get on most handsets or mobile devices.