OK, I'm running Xcode 3.2.6. I think that all ways to launch an iOS app do cause something to appear in the debugger console.
If I Build&Run-Breakpoints on on the Sim I get about ten lines of verbiage from the debugger followed by NSLog output.
If I Build&Run-Breakpoints off on the Sim there's a single line that says Session started, followed by NSLog output.
NSLog output also ends up in the system console app if you run on the Sim. printf output ends up in the Debugger console but not in the system console. Do you see any of your NSLog output in the system console?
It's pretty similar if I run on the device.
Is it possible that there is output but it's not visible? Does the scrollbar look like there's content? There was at one time some font bugs that caused problems with the debugger console. Could the text color be white? Does the debugger font look OK in the Preferences > Debugging panel?
Does your code do any messing around with the standard output streams? dup2?
If you stop at a breakpoint in a function that has a local variable, like an NSString, and you right click and choose print description to console does something appear?