There were reports filtering out that iPhone apps may not be legal for business use. Those stories are untrue according to PC World at least for users of the App Store in the US. Those original reports were from language in the terms for Sweden and the UK that said apps are for personal, non-commercial use only.
PC World reports that the language from the UK and Swedish App Stores is not present in the app store rules for the US. The Apple TOS apparently places no limitations on the use of apps in the US.
PC world figures that the terms and service may have been misunderstood. It wouldn’t make much sense to have apps not be usable legally to business users.