I want to design an instruction manual to be read on an iPhone and maybe Android devices.
I know that the iPhone screen width is 320 pixels. What would the best page size be? What is the best height?
The book would probably be read via iBooks.
Books for electronic devices are typically sold with reflowable text. I suggest you look into how to build an ePub. I suggest this because your are not allowed to sell or offer PDF format on iBooks
Since you have mentioned possible building for android I would advise reflowable and not fixed. Fixed layout ebooks are developed based on the devices viewpoint. Since its based on the devices viewport its typical that an ePub be developed for each device. Fixed layout is common in children's books, comic books, and enhanced books for a dedicated device.
You can design the book in inDesign and export out as a reflowable ePub. You would setup your document in indesign based on the resolution dimensions and on export it will convert your ePub as reflowable.
I would suggest developing as printed and depending how tou build your book you can export out as reflowable and it would work on about every device depending on the content and development but thats outside the scope of this question. There are plenty of tutorials id you do a search.
If you're set on developing for iPhone alone these specs might help: http://www.idev101.com/code/User_Interface/sizes.html