There’s a lot of misinformation and confusion on this subject.
There are two ways to develop for the IPhone. The first way is to use Apple’s official IPhone SDK, which is the only way to get your app distributed via Apple’s App Store. It is also the only way to get your app onto a non-jailbroken IPhone. This official SDK does indeed run on Intel Mac only. It also costs you $99 per year, for the right to ship your compiled apps onto your (or anyone else’s) IPhone.
Or you can jailbreak your IPhone and use the open-source toolchain, or some combination of open-source tools of your choice. Once the IPhone is jailbroken, you can use gcc to compile for it and then ship your apps to the phone via ssh and scp. This pipeline works from Linux, Windows, PPC Macs, or just about anything you’ve got. You can even compile directly on the IPhone itself.
Legal issues with the latter pipeline are murky, of course. You can find lots of people on the internet–none of them lawyers–enthusiastically espousing arguments for and against jailbreaking. For myself, I will remain neutral on the topic.