Rodney - 4:25 pm on Apr 12, 2010 (gmt 0)
There are already ads in a lot of free iPhone apps.
I didn't read the announcement as a *requirement* that all free aps have ads. Just that Apple is offering a new way for free app developers to monetize their apps that delivers a different style of ad.
The regular ads in free apps take the user out of the app and to the advertisers web page. In the demo of the iAd that I saw, the user got to stay in the app they were using and were able to view the media rich ad and then go back to using the app.