As a developer, let me chime in. The applications we have been designing "for ages" for variable-sized displays often were designed to be windowed anyway. This meant there could simply be more stuff on screen. When you get a higher-resolution screen, your scroll bars, tool bars, window titles, and buttons take up a smaller percentage of your screen, which means you can open another tool bar or even another window.
By nature, most apps for the iPhone/iPad have been designed to run full-screen and have been carefully hand-crafted for that resolution.
Many games on PCs were designed to run full-screen too, and they often simply set your video mode to whatever they liked (or perhaps offered a few fixed choices). For modern games which are entirely vector-based it is not a big problem to render for any resolution you like (the same goes for OpenGL games on an iPad) but many games and apps on iOS have hand-drawn, bitmap graphics. This is one reason why many apps look so slick.
So, executive summary: Yes, it most definitely would be a challenge.