One thing I noticed though is in my Itunes on the left side where the Iphone icon is, I clicked on the arrow beside the Iphone to open the submenus I guess of the Iphone, basicaly it has a bunch of 'folders' labeled the same as my library 'folders' on my itunes i.e. 'music', 'movies', 'tv shows' and etc... EXCEPT FOR APPLICATIONS

..... so I'm asking somebody here who got a working applications on their iphone to connect theirs on the itunes and see if there is suppose to be a folder 'applications' under devices on the iphone?