Today in Cupertino, Steve Jobs announced that Apple would sell iPhone (and iPod touch) applications over App Store, which can be used over-the-air on the iPhone itself, or can be sideloaded via iTunes on a computer. It comes with the 2.0 firmware update. Apple says it's exclusive, meaning it's the only place people will go to get iPhone apps.
It looks a lot like installer.app, but with icons. It's got top 50 apps and search. The apps will automatically update programs, like installer.app.
On the developer side, developers pick price, and get 70% of the revenue. There's No credit-card or hosting fees. Free software will be supported, too, but porn and other raunch will be omitted. [Apple SDK Live Blog]