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Sounds like a JVM will indeed break the terms, including the one about not allowing scripting languages or ways to dynamically run loaded code. JRuby and Jython would be big no-nos. As soon as you loaded either one (or any one of the other dozens of JVM language interpreters/compilers), the app could connect to the Net and download new code. Apple does not want to allow that.

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Oh man, this could be a big issue for Apple. Unless they had access to your source, how could they even know that your application utilizes dynamically loaded code/scripting?

Your application could be: Python -> Jython -> JVM -> compiled iPhone native and Apple cant tell the difference (or could they?).

Also, since everything runs in the same sandbox, Apple would technically not be able to stop people using the JVM with their applications. The JVM itself is not its own application, its just used to translate java byte code to native iPhone code for your application. Again this raises potential issues on how Apple could police that.

It would be quite easy to inspect the bytecode and find if the class loader would be invoked. I don't believe that you can eval source with mobile Java, so its fairly watertight.

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