Unity uses MonoTouch and is written in C#. This is banned.
It’s not as clear-cut as that. There is reason to worry for sure, but there are still plenty of reasons to have hope for Unity:
1. Unity has made some awesome, quality App Store apps, which Apple themselves has featured. Some are very popular, and losing them all would carry some user fallout (to say nothing of developers).
2. Unity has been on the App Store for a long time.
3. Apple and Unity have worked together. (And Unity came from the Mac to begin with.)
4. Apple changes the terms of their agreements all the time. This wording is not final.
5. Apple grants exceptions to their own rules all the time. (Unreal Engine being an example we’ve heard about.)
6. Unity Technologies has expressed cautious optimism—and they’re a good, honest company who has always treated their customers with respect and more.
7. Apple has good reason to dislike Flash, but not Unity.
8. Unity iPhone requires a Mac and works with Xcode, not instead of it. It even introduces some people to Xcode, and people use Xcode to extend Unity’s capabilities.
9. Apple has a history of 180-reversals of bad decisions—especially when it comes to the App Store. And Unity doesn’t even need that big a shift. Apple could easily bar Flash without barring Unity.
10. There’s always room for interpretation. For every anonymous person who thinks the wording is iron-clad doom, someone else with some standing (like John Gruber and David Helgason) thinks it’s not yet fully clear.
11. Unity (and various community add-ons) has been great about implementing new iPhone OS and SDK features. They’re not holding back Apple innovation as Adobe/Flash would. In fact, by updating the engine to support new Apple features (like Game Center, no doubt), they make it easier for small developers to update their games and use these new services.
12. It may all be just poor wording, easily corrected, and there was never any intention that all these consequences would come up.
13. If the wording were to mean the worst after all, it would affect a lot more than just Unity and Flash, and more apps than we even know. All kinds of big-name ports of games from other platforms could even be affected. Unity would not be standing alone in calling for a better resolution.
14. Games are not the same as other apps. They use their own UI and have their own tools and constraints. Flash could do real harm to native development of non-game iPhone apps, if the iPhone UI starts to be widely violated. But a game-specific tool like Unity is much less dangerous.
15. Unity reportedly already works decently with the new OS 4 multitasking.
16. Unity has a talented, innovative and dedicated team who has worked around big App Store limitations in the past. If the final answer IS the worst-case, that the current version does not comply, then they’ll get to work, not give up. Their solution could then require Unity developers to do some aggravating re-working of games, but at least Unity would be likely to make that shift as streamlined as possible.
In short, there is reason to hope that Apple wouldn’t WANT to stop Unity the way they want to stop Flash, plus reason to hope that it’s practical for them to block Flash without harming Unity. Hopefully this is a matter of Apple neglecting to even think about Unity (yet) in this matter, rather than any specific intention against Unity.