Scott Forstall, Senior VP of iPhone software, took the stage as part of Apple's iPad introduction event to announce that "almost all" of Apple's iTunes App Store iPhone and iPod touch apps will be compatible with the new, 9.6 inch device.
Users can either run them at 1x iPhone scale (320x480) or hit a 2x button and double the size. They don't fill the screen, however, but run inside a black frame (like SD on a big HD display).
Facebook was shown as an example.
Not shown was anything approaching multitasking -- no running multiple iPhone apps as windows, or even tiled side by side on the massive screen.
Forstall also announced a new SDK with iPad support would be made available today via developer.apple.com.
Games, like EA's Need for Speed, Gameloft's NOVA, MLB at bat (with tons of visible stats) were shown running full screen, as early iPad versions.