Excellent essay by Daring Fireball's John Gruber on Apple's poor decisionmaking regarding the App Store. They've had a penchant for kicking out applications due to one reason or another, and the main trouble here is that there's no way to know ahead of time whether or not your application will offend Apple until you actually create and submit its 1.0 release. For any app other than the most trivial, this means a lot of software-development time and energy not just nonchalantly discarded but made permanently unusable, since there are no routes to installing software on the iPhone other than Apple's.
If Apple maintains their current behavior, the only high-quality iPhone applications written with confidence will be published by large companies with enough clout to broker distribution agreements with Apple - with the occasional surprise gem from a hobbyist or other individual hacker. For the wide middle band of independent software professionals and entrepreneurs (such as yours truly), the App Store - and therefore the entire iPhone - looks less attractive as a target each time Apple arbitrarily nixes someone's hard work for unclear and inconsistent reasons.
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Excellent stuff.