Here's a piece of what Ars is quoting from the new agreement:

You will not, through use of the Apple Software, services or otherwise, create any Application or other program that would disable, hack or otherwise interfere with the Security Solution, or any security, digital signing, digital rights management, verification or authentication mechanisms implemented in or by the iPhone operating system software, iPod touch operating system software, this Apple Software, any services or other Apple software or technology, or enable others to do so...

It also says that anyone using the SDK to develop software can then only get distribution through the App Store, and at Apple's sole discretion. As Ars points out, it's not going to dry up jailbreakers, but it will make those gray area developers a little more skeered of swerving from the path. [Ars Technica]

We initially suspected a bug, perhaps, but he also says that the streaming code is unchanged between 1.2 and 1.3. So, uh, we're not too sure what the hell happened here. And what does this mean for other streaming apps that use a lot of bandwidth, like Pandora? All of this is not to mention that AT&T has assured us over and over that the iPhone plan is truly unlimited. Good to know the standard App Store review policy is still in effect, though. [return7 via Ars]

The bad news is that that's pretty much what the situation was a few months ago, so that's not really saying a whole lot. If it's spiffy enough to match Steve's criticisms, then maybe there's some hope, but the ball is in Apple's court, and it's been gathering dust there for a while. [AppleInsider]

As he notes, the Apple's iPhone Programming makes it clear that OpenClip's execution was making clever use of a loophole, rather than operating on totally safe ground:

"The sandbox is a set of fine-grained controls limiting access to files, preferences, network resources, hardware, and so on. In iPhone OS, an application and its data reside in a secure location that no other application can access."

Access being the key word there. In the most recent 2.1 beta, the sandbox has been reinforced with titanium so that apps are no longer allowed to access another application's data, driving a stake through the heart of OpenClip's implementation—it doesn't work in any of the 2.1 releases, to wit. Apparently the stronger sandbox was in play before OpenClip made its splashy launch, so it's not just Apple being mean (aside from the fact they haven't given us copy and paste in the first place). Either way, it'll be back to waiting for Apple to deliver, unless you go the jailbreak route.

If you're unacquainted with the iPhone's file structure, Gruber's post makes for good education anyway. [Daring Fireball]

The framework is expected to roll in the fall. As TechCrunch points out, Facebook's iPhone SDK indicates that mobile is a big part of their vision—so expect to see a lot more Facebook on your phone (and other gear) in the near future. Hope you're into oversharing! [TechCrunch]

"There is a huge shortage of iPhone developers. Good thing there are books and classes to get new ones up to speed. Oh right: FUCKING NDA." More seriously, he points out that the NDA, unless lifted, threatens dev conferences like iPhoneDevCamp 2, where they'd get together to obviously talk about programming. The apps are out there, it's silly they still can't they talk about creating them. [Fucking NDA via TUAW]

Developers can’t touch or enhance iTunes or iPod functionality in any way, shape or form—they can’t even access your music directory, meaning you better like the way the iPod button works just the way it is. Don't expect any apps to use your wonderfully curated music library either.

Casualties: Instinctiv Shuffle, a smart shuffle application that learns your skipping behavior to figure what you actually wanna hear next. Tap Tap Revolution became the watered-down Tap Tap Revenge.

No processes can run in the background—apps have to completely quit when exited, completely contained in their little sandbox.

Casualties: IM is a popular example, but Apple’s upcoming push notifications will probably make them a moot rallying point. It also means that third-party copy-and-paste solutions won’t work, since you can’t move the text to another application. Also impossible is a fantasy app of ours, TrippWire, that would record phone conversations (all legal considerations aside).

Devs can't integrate apps or functions into the OS. Third-party apps will always be second-class citizens, and can't significantly alter iPhone functions, including accessing the calendar or SMS messaging or adding any content to the otherwise useless lock screen that appears when you wake up the phone.

Casualites: Intelliborn’s Mario Ciabarra lamented to us that the SDK actually doesn’t give you all the same APIs and tools as Apple, and is missing a whole bunch of critical ones that’d let you add content to the lock screen, access calendar events or mail, or change the way the iPhone responds to events, meaning there’s no way for him to build his app Intelliscreen (above) using the SDK. Instinctiv CEO Justin Smithline also told us that you simply "can't create a well-integrated app," like Instinctiv Shuffle. This set of restrictions "flies in the face" of Apple's own philosophy of the creating beautiful software with the best possible user experience, says Smithline.

Pirated games, movies or whatever are a no-no in the App Store, obviously.

Casualties: NES.app, or any emulator, really, dooming us to bloated, over-priced renditions of Tetris by videogame mega-publishers. Also off limits, a dedicated video streaming app for something like the old Stage6 or QuickSilverScreen, which traffics in content that’s, um, not legally spotless, to say the least.

A bit different than the piracy concern, apps using copyrights, trademarks or intellectual property of a major company are sticky, and the App Store will steer clear of them if they're not developed by the company itself.

Casualties: Apps like TiVoRemote would have to be developed by TiVo or else they'd have dicey prospects, at best. Basically anything involving a company’s intellectual property or trademarks from anyone but the company themselves. An app that'll stream movies from your Netflix "Watch Instantly" account by anybody but Netflix would be another obvious foul.

Devs don't have deep access to the hardware. Jonathan Zdziarski, creator of NES.app and author of a few iPhone books, told us "much of the lower-level functionality has been hidden" in the SDK so "if your application is going to meet the necessarily political requirements, these more powerful features are off-limits."

Casualties: Stuff like Camera Pro, which gives you a ridiculous amount of control over the camera, would have a hard time complying with SDK rules. More than that, Zdziarski says, Apple has "privatized" the CoreSurface framework, which is "making it very difficult for developers to write their own movie players, 2D games, and similar kinds of renderings," especially with performance approaching passable.

Apple's app review process is a complete mystery to developers and takes forever, which can affect app quality and horribly delays app updates.

Casualties: Aurora Feint's developers revealed to us, "How the whole review process [for applications] goes is unknown to us," and that Apple doesn't even tell developers how many times their app is downloaded—they’ve gotta figure it out by the size of the check or have the app report back. NetNewsWire's Brent Simmons related the cloak-and-dagger headaches to Wired, telling them that developers are "not supposed to discuss actually programming on the iPhone with anybody—even though that would raise the quality of the apps." Between July 11 and July 17, Simmons pumped out five updates to its application and none of them had showed up by the 17th.

Apple limits app testing to five devices, so there is basically is no beta testing.

Casualties: Us. We’re the beta testers. Aurora Feint’s developers told us that for app testing, “Apple requires special signing to be done that binds each app to a specific device for debugging purposes,” and it’s limited to five, so they "definitely had some people camping out in our offices" to test. Twitterific creator Craig Hockenberry notes that the iPhone app's crash report come to a dev in a form barely more comprehensible than Swahili, on top of lacking info about what's going on in the phone outside their app. And then, if you do have a fix, there's no way to test it, other than to release it out into the wild through the App Store, "the developer equivalent of playing Russian roulette."

On the upside, Apple appears to be launching a beta testing program soon that'll let devs test apps on up to 100 devices, which jibes with what Tapulous CEO Bart Decrem alluded to in a conversation with us. Hopefully it does roll out in the next couple days, as expected. But even then, putting beta software on a device will require the iPhone or iPod serial number, and will still have to snagged through the App Store.

Apple's number one priority is Apple.

Casualties: Basically anything that threatens any of the iPhone’s core functions or key profit centers. Opera told us they aren't developing for the iPhone because the SDK doesn't allow apps "that interpret code, which is essentially what the browser does." Mozilla CEO John Lilly is more acidic in this month’s Wired saying, “Apple makes it too hard” but they’re using “a business argument masquerading as a technological” one. Any formats not supported by Apple essentially don’t exist. AT&T has implied to us that it’s Apple that’s not allowing laptop tethering, though there’s obviously network considerations for the carrier, so we're reasonably, but not totally, sure. The NY Times makes it clear that distributors of free music or video will have it tough too, so don’t expect a MyWaves or a Hulu app until the rules get clearer. Steve Jobs told the NYT that this does represent a competitive threat. "We will compete” with developers’ apps, he said blatantly.

As anyone running the 2.0 software knows, there are definite stability issues, lending a lot of credence to Apple's sandbox for applications—could you imagine it being more unstable? On the other hand, the massive anticipation for the Pwnage 2.0 tool, the vast universe of applications we’re missing out on—not just pirated goodies, but honest-to-God mission-critical wares—shows the SDK clearly doesn't provide everything we need it to. And it might never. But the black market app economy can and does fill the void. Apple might seek to shut it down, but the iPhone's two-class app economy may prove to be its greatest strength.

Related: Gizmodo's Essential Iphone Apps

You're proud of the work you've put into your iPhone SDK application. Show us what you did. Email your entry to tips@gizmodo.com with the subject "iPhone SDK App Contest: Name of App" with the name of your app there. Each entry should include screenshots (as many as it takes to properly illustrate your program) as well as a 1 paragraph description telling us what it's all about. We'll showcase the best ones here for the world to gawk at.

We also know that there are tons of very cool applications such as Sling that might not even be approved by Apple as an official SDK app. That's why we're taking entrants for unofficial (jailbroken) apps as well. Send those in to tips@gizmodo.com with the subject "iPhone Unofficial App Contest: Name of App". Essentially, we'll be getting a weird kinda sorta head-to-head that pits bigger name companies/development teams against hackers.

Update: Well, the App Contest was inconclusive, thanks to Apple's NDA and the subsequent effect of no developer being able to submit their app to us. Our de-facto winners are listed in our favorite iPhone apps.

This fifth beta release of the iPhone SDK includes a complete set of tools, compilers, frameworks, and documentation for creating iPhone OS applications. These tools include the Xcode IDE, and the Instruments analysis tool, among many others. With this software you can develop applications that run on iPhone and iPod touch using the included iPhone Simulator.

[Apple]

First, we already know that apps running in the background as a process is possible on the iPhone. The iPod app, SMS app, and various other apps all run in the background now and continue running no matter where you go in the phone. Also, user-made Installer.app apps like Apollo (an IM client) already run in the background just fine. So why did Apple make this limitation that all apps have to quit whenever the user switches out? Memory management. From Apple's Human Interface Guidelines for the iPhone:

Apple has no idea what combination of applications you could possibly install on your phone, and they can't control it. If you were to install two apps that took up loads of the iPhone's memory (we're talking RAM), and they both ran in the background, it would slow down the phone's other, more important tasks such as calling or iPodding. If this were the case, Apple would be blamed for making a slow or non-responsive phone even when it's not actually Apple's fault. This is exactly the thing that goes on in Windows Mobile devices. It's fine when you're just running normal, natively-installed apps, but when you get to multi-tasking with your own installed programs, the phone becomes sluggish and everyone curses Microsoft. Apple wants none of this.

So the implication to you, the end-user, is that you can't have apps running in the background, constantly checking the internet. This means no RSS reader that's always up-to-date and no IM apps that always sit in the background, listening for messages. If you're wondering Exchange's push email and calendars are going to work in this scheme, it'll be integrated into Apple's first-party Mail system, which can be allowed to run in the background.

But in the end, it's only a small portion of apps that are really affected by this rule. Games or utilities can save their app status to disk often so that you can resume where you left off when you start it back up. But until the iPhone allows SDK-applications to run in the background, you're probably better off using a web-based chat application in Safari (which already has permission to). [Tech Crunch]

• They like the idea of being in the iPhone with Silverlight instead of Flash: "Silverlight for the iPhone is of course interesting," he said. "I can't say there's been extensive discussion with Guy's old boss [Steve Jobs]."

• Far from being non-profit, he accused Apple to take a too-large slice off the developer: "grabbing 30 percent of every bit of revenue, it's a good business if you can make it."

• This model may limit the royalty free distribution of Silverlight: He failed to notice that 30% of zero dollars is zero dollars.

• The Exchange connection was not a surprise for Microsoft: "We've licensed ActiveSync for a while. That's been an option that's been available to Apple. It was certainly an option we knew Apple might take advantage of."

• The scream reprisal is not a joke, as this video shows.

On his defense, someone asked him to do it. Actually, forget about the defense. No wonder Bill is divorcing him. [Georg Holzer via ISS via Cnet]