When I try to execute my iPhone application in simulator, I get the dreaded error
Looks like this is your key bit (doesn't normally come up in system log):
VoiceOverTouch exiting because accessibility is not enabled. To enable do this:
'defaults write com.apple.Accessibility AccessibilityEnabled true'
Your app has some dependency on accessibility being enabled. Suggest you follow the instruction and run the bit in quotes on your system console.