Short answer to all that blob in the agreement is YES.
Apple is basically shooting itself in the foot by limiting programs to a few languages:
- C - which is not really suited for application development these days, due to it's low-level nature. It's mostly a systems programming language today.
- C++ - which makes it harder to shoot your phone, but when it happens, it's with a bazooka. Apart from Qt, there aren't any complete application frameworks to use in C++ (and Qt doesn't support iPhone - yet).
- Objective-C - which was invented by Apple and of course will be supported.
- JavaScript running in WebKit - basically a web application.
They are deliberately limiting what tools you can use to develop for iPhone, which will almost certainly get them in serious trouble. I'm sure a good sized chunk of the community will just quit iPhone development and migrate to a different platform like Windows Mobile, Symbian, Android or Maemo, which are totally open - you are free to write your application in LOLCODE.
Apart from possibly making iPhone junk for developers, it also gives Adobe a nice kiss:
Apple deliberately blocks Flash from iPad, and now they are also blocking it from iPhone. The nummer is Adobe Flash's CS5 biggest feature is deploying Flash applications to iPhone.
tl;dr: Apple is basically shooting itself in the foot with this move.