They "recommend" people don't build businesses like TweetDeck, because they believe there isn't enough room. However, it seems to me that TweetDeck has done pretty well for itself.
http://groups.google.com/group/twitter-development-talk/brow...
It seems stronger than merely a "recommendation" to me. They flatly state that new apps may not replicate the mainstream Twitter experience. Existing developers are allowed to continue to "serve their customers" - but I think developing new product lines as TweetDeck is doing, is going to run afoul of the new API terms of service.
Unless they have a side agreement, I expect some sort of battle to arise from this.