Leopard,
by Apple's own admission, is only recommended for G4s of 867MHz or faster.
In other words, anyone who cannot afford at least the £399 for the cheapest Mac Mini cannot develop iPhone software. Well, that will reduce the number of developers by at least 0.00001 percent.
Yeah i dont get the 10.5 only thing. If developers are developing on 10.5 will the apps be backwards compatible kind of like universal OS (Tiger/Leopard) support?
iPhone apps will not be compatible with Leopard, Tiger, Panther or anything. They will be compatible with the iPhone. That's why they are called iPhone apps. You will very likely need the latest version of iTunes to install applications on an iPhone, so users will need any computer that is capable of running the latest iTunes version.
For developing Macintosh applications, someone developing on Leopard can create applications that will work on Panther, Tiger and Leopard and use features that are available on each system. If you want to write applications that run on Jaguar as well, you need to develop on nothing later than Tiger. In that case, your application will run on Leopard, but cannot use any Leopard-only features.
It's still bad news. There are developers with iPhones who would not touch a Mac with a stick. And I bet their numbers are way above the amount of developers with an iPhone and Leopard.
I think if you claim that you "would not touch a Mac with a stick", then Apple will not touch you with a stick. Anyway, you will have a very steep learning curve ahead if you haven't done any Cocoa programming before.
The small developer probably won't be too happy with having Apple to take a cut of sales. Just imagine if Apple demanded a sale cut from OSX apps!
Apple gets a cut from every application that you buy in an Apple Store. Just like PCWorld gets a cut from every application that you buy at PCWorld. Apple also gets a cut from every song or video that is sold through iTunes, just like Amazon gets a cut from every book you buy there.