It works, not just on iodine but on chlorine as well, but I'm not sure how much vitamin C you'll get. The ascorbic acid bonds to them, creating a different compound that is biologically inert and is basically tasteless. There is some taste, but but I've drank municipal water that was a lot worse, it's a little bitter.
You must want to wait to be sure your iodine or chlorine has done its thing though. The reaction is pretty much a one way ticket, and anything still alive when the reaction starts is still alive when the iodine rendered inert.
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-IronRaven
When a man dare not speak without malice for fear of giving insult, that is when truth starts to die. Truth is the truest freedom.