If you have a jailbroken iPhone, you can install the iphone-gcc toolchain onto the iPhone through Cydia and that way you can just compilie the apps on the iPhone. Apps that are developed this way can still be submitted to the App Store.
And although Mr Valdez said it is a grey area (which it is), jailbreaking is incredibly easy and pretty much risk free. Yes, it voids your warrenty but you can just do a restore and they will never know.
