It's no news that the iPhone, the iPod touch, and the forthcoming iPad are closed systems. Reading the Agreement, however, reveals just how closed those systems are, and just how committed how Apple is to reversing decades of developers' abilities to publish and market apps as they see fit - not to mention the user's right to load whatever software they want onto devices they have purchased.
[...] even if you follow Apple's directives to the letter, Apple may, in the words of the Agreement, "reject Your Application for distribution for any reason, even if Your Application meets the Documentation and Program Requirements."
The reasoning behind Apple's seeming arbitrariness and demonstrable capriciousness was explained over 30 years ago by comedienne Lily Tomlin when she lampooned "the Phone Company" with a mocking summary of their attitude to customer service: "We don't care. We don't have to."