I am using Xcode7 and Swift with Storyboards. When I open the LaunchScreen.storyboard, and I try to set a Custom Class on it, Xcode complains that one cannot have a custom c
No, The launch screen is shown before your app starts executing in order to provide a transition from the Springboard to your app while it is loading.
You can either use a fixed image or you can use a simple storyboard scene using only standard, static UI elements - labels & images.
This storyboard scene is actually loaded and displayed by the OS, so it would be a security risk to allow your code to execute in that context.