Paving the way for genuine, binary applications that run on the iPhone (and don't originate from Apple), developer "Nightwatch" has created, compiled and actually run a basic "Hello World" application natively under the stripped-down version of OS X that ships on the iPhone.
The new development is part of the "iPhone binutils" project, with a stated goal of producing a high quality set of binary utilities for the Apple iPhone, primarily an assembler and linker.
According to the iPhone Dev Wiki, certain parts of the toolchain -- dubbed ARM/Mach-O -- including the assembler are currently being refined and tested but will soon be released.
Already, however, there is a working compiler driver to automate the process of creating binaries for the iPhone. This compiler driver is a drop-in replacement for the gcc tool. Once the assembler is finished and refined, standard Unix packages will theoretically be able to be used to create iPhone binaries.