We've received provisional confirmation from Apple representatives at WWDC that the "robust Web 2.0" iPhone applications Steve Jobs spoke of during his keynote address will only be deliverable through the Web. In other words, it appears that users will have to utilize an active network connection and visit ordinary Web pages to access these "applications."
This is a major point of attention for prospective developers, as it plausibly denies the ability to store Web-standards-based apps locally for easy offline access and display within the normal iPhone interface (essentially Widgets, which Apple has not given any indication can be developed by third parties for the iPhone). So developers presumably will not be able to add icons to the iPhone's primary program list for launching applications, and users will need to be in range of AT&T's EDGE network or in a WiFi hotspot to access any third-party applications.
It looks like the iPhone's third-party applications tray will be the "Favorites" menu in Safari.