Ars Technica has sources that indicate that Apple is prepping Mobile Safari to run applications and web pages offline. You know, widgets. These widgets will use the same technologies as the AJAX web apps that are out there now -- HTML, CSS, asynchronous Javascript and XML, cookies, etc., but with the added bonus of a little extra local storage. Maybe some javascript functions that allow you to access the actual API of the phone for contact / calendar integration and the like will make it as well.

Widgets
figure 1: the Widget manager from OSX 10.4. The iPhone has been destined for widgets. Note the similarity of this on the iPhone (figure 2)

Iphonewidget
figure 2: The bottom bar on the iPhone. Note the similarity. I do not think the similarity is accidental. Why would the iPod Touch have a different bottom bar?

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Apple is working on a Google Gears-like system to cache online applications for use in mode, or other situations where the network is not available. Their expected timeline for announcing or delivering this is January. In case you're new to the Apple world, January is code for Macworld Expo, the same Expo in which Jobs announced the iPhone.

Lastly, their source indicated that Apple is not currently working on a native SDK for release to the general public, and that AJAX Web apps are going to be the way to go. Ars Technica's Apple source has expressed some frustration in that:

"You can't write [bleep]ing [bleep] in that.... Jobs is a control freak and doesn't want people messing with perfection."
He's not alone in his frustration. You can practically read the spittle over at gizmodo. Jesus Diaz is so pissed he's replaced every outbound link in his article with another link that links back to Gizmodo. Macworld.co.uk meanwhile is confusing Javascript with Java. There won't be Java on the iPhone. Jobs confirmed that maybe a day after he announced the iPhone in January.

Speaking personally, I know that it's not the same as having native applications. But, I am glad that there will finally be some mechanism for apps beyond the data URL trick and bookmarklets. I've long said that I expect some sort of 3rd party app, whether it be widgets or native. Frankly, I'd much prefer native, and that's part of the reason that I'll likely never update my hacked 4GB iPhone (I need it for screenshots and the like), but widgets can do a lot of what many, if not most, people want, and I eagerly look forward to that on the 8GB iPhone.