This is a new iPhone project, only 1 target (different from this question)
On build we get:
Failed to launch simulated application: Unknown error.
1) Restart Xcode; 2) Use "Get Info" on Info.plist and uncheck current target (Info.plist would be added anyway). That's all.
This happened to me once and I think I saw in a blog to simply quit and restart Xcode. Miraculously, it worked for me. I doubt this is the end all solutions to all problems like these though, but if you haven't yet closed Xcode, it's worth a try.
I've had this twice for the same reason: adding a folder called Resources to the project. This is a naming conflict with something (though there is nothing called "Resources" in the application bundle by default). It might be that mysterious naming conflicts are a common cause of this problem.
To fix I renamed the folder to something else ("Assets"), manually deleted the entire build folder (clean didn't work) and quit the simulator.
This might be because items are missing for the target. Expand the target and verify that all needed source files and libraries are there. Restart Xcode after you've messed around.
alt text http://pici.se/pictures/TsnTQxhKh.png
If other projects work fine; start a new one and copy the files. Combing through configs just won't do it (since XCode has, well, thousands of config possibilities).
You can send me a check with the $200.
P.S: When you actually do start a new project, do it step by step. Run it after each change. Maybe you will find your problem. It might be a ton of work, but it might also help the other thousands of lost souls who have an 'Unkown Error'.