Apple's definition of a "Universal Binary" is an executable the runs on both PPC and x86. However, it is possible to create a fat binary that runs on all three architectures at the same time.
Apple uses the term "universal" in somewhat inconsistent ways. In the Get Info window, it means what you say. But in developer documentation, it tends to mean a fat binary, with PPC/x86 being the most common pair.
It is possible, however, no PPC binary is allowed in the Mac App Store, even if your binaries also include support for other platforms. This could be a problem if you use third-party binary-only libraries as you have to strip the PPC stream manually from them before you can submit your app to the Mac App Store.
That's not too big a problem. The developer tools include a tool called lipo that can easily remove unwanted architectures from fat binaries.
Only with Xcode 3. As I mentioned below, Xcode 4 does not include support for PPC. Also, there are really four architectures (i386, x86_64, ppc, ppc64), but Xcode 3.2.6 does not like compiling for ppc64.