TheOS is a very handy tool that is limit-free. You can code for iPhone/iPad/iPod and make actual apps.
I personally do not have much experience with TheOS as the most I have done is make a MobileSubstrate hack for a game called Monster Mayhem. If you are planning to release your app to the appstore I would recommend you either get VMWare and run Mac OS X under it for your development. The VMWare copy of Mac could be slow or fast, depending on your system. Friendly tip: Run Mac on computers with 6+ GB of ram.
Coolstar is the person behind all this awesomeness, and you should refer to his website for more information regarding this tool. I have actually made a test app (default app that you literally just compile right when theos starts) on my iPhone and I have to say I am impressed.
TheOS website: http://coolstar.org/iOSToolchainOnWindows.html
User friendly easy to follow tutorial for creating your first hello world app: http://blog.austinlouden.com/post/47644627216/your-first-ios-app-100-programmatically
Good luck!
