I just upgraded to iPhone SDK 3.2 Beta 4. Since doing so, I have not been able to get the app to launch in the iPhone simulator - it keeps launching in the iPad simulator. I
From Apple's documentation: "iPhone OS 3.2 does not support iPhone and iPod touch devices. It runs only on iPad." There's no way to target 3.2 for iPhone, so there's no Simulator. Ergo, you'll have to wait for iOS 4. Fortunately, that's only 4 days away now... of course it won't support the first generation of iPhone devices, but for all other iPhone users it's a free upgrade. Not sure about iPod Touches.