According to Steve Jobs,
"The App Store is going to be the exclusive way to distribute iPhone applications," Jobs says. "We think we've got a great business deal for developers." Developer picks the price. Developer gets 70% of the revenues right off the top. We keep 30%. No credit card fees for developers. No hosting fees. No marketing fees. "And it's paid monthly," Jobs says. "This is the best deal going to distribute applications in the mobile space."
Most importantly, free applications will be available without charge (yay!). Limitations for the App Store, as stated by a slide presented by Jobs, are "Porn, privacy, bandwidth hog, unforeseen, malicious, illegal".