He begins by saying that the iPhone was build essentially in the same way that Mac OS X was built, comprised of four layers. The first three are identical to the Mac: Core OS, Core Services, and Media. However the last layer of Mac, Cocoa, controls interactions with things like the keyboard and mouse. In the iPhone, they created Cocoa Touch for working with the touchscreen.
As far as developing for the iPhone (the moment you've all been waiting for... drum-roll please!), Forestall says that iPhone development will be based around Xcode, the current developer environment for Mac OS X. It will now support the iPhone SDK.
He also announced a new tool for developing on the iPhone, an iPhone Simulator. It's essentially a software iPhone that sits right on your desktop and lets you test your applications right on your Mac (sorry Windows users, it's Mac only). While a developer is working on their application in Interface Builder, they can just hit the Build to Go button and it launches on the software iPhone to be tinkered with.
Hitting another button will send the app off to a connected iPhone to be tested on the actual hardware. It comes with a debugging tool that runs with just the click of a button on the computer that will debug the iPhone remotely. It even comes with CoreImage Funhouse for testing core image and animation, both compatible with the iPhone.
Update: After the SDK Event, the press was treated to a Q&A session with Apple execs including CEO Steve Jobs and VP of iPhone Software, Scott Forstall. When asked about VoIP applications, Jobs explained that Apple would allow them over WiFi, but not a cellular network.