Bug reported as fixed by Apple, see accepted answer below ...
UPDATE MON AUG 23rd 10:00 GMT
Although the bug report with apple hasn\'t been closed yet,
I've also been plagued by this problem. I had a fully functional In App Purchase working fine. I later uploaded a new binary and approved it. I made some other changes to the app, and also used a foreign "IN APP" purchase User, attempted to sign-in in Settings. Later when I tested it again, itt was no longer working. The error I got was "Unable to connect to iTunes", "Error Domain=NSURLErrorDomain Code=-1009". Pulled lots of hair out. I was able to fix it by signing out of iTunes account on the iPhone, "cleaning all targets", AND also signing out of iTunes on my MAC, (I closed iTunes), creating a new "local" In-App" user (necessary?). Attempted to sign into that account on my iPhone. Then it started working! Some of the above may be voodoo, but it worked. Hope this helps a few people.