Those of you having trouble with In-App Purchase (IAP) make sure a few things are done correct,
- create your app in iTunes as you do for release
- setup In-App Purchase (supply everything including screenshot)
- create test users (very important as you cannot use a real user to test while in Sandbox)
- go to your app View Details and make sure you see the In-App entry that you've setup show up there, if not "edit" that section to choose the appropriate In-App entry (very important)
- click on "Ready to upload binary" button (again, very important). Don't worry about uploading binary at that time as you have 90 days from then to upload your binary.
- implement IAP in your code (there are many samples out there, I prefer http://xcodenoobies.blogspot.com/2012/04/implementing-inapp-purchase-in-xcode.html)
- if you are testing it on a device make sure to signout (Settings > iTunes & App Store > Signout (very, very important)
Once all these are done you should be able to make In-App purchases using those test accounts. It worked after a few hair pull-offs for me.