When I use Application Loader, I get to the point where it asks me to \"Choose...\" the file to be uploaded.
If I understand correctly, it supposes to be the appName.app
Go and login to the iOS Provisioning Portal. From the menu on the left, select "Distribution" and you should be landed to the "Prepare App" tab. Read through the instructions carefully, you mostly need the information under "Building your Application with Xcode for Distribution". Remember that "Only Team Agents are authorized to prepare and submit applications for distribution".