That's part of the speculation, though--that the current tools compile for ARM and the code runs on an emulator, paving the way for iPhone OS 4.0 and the XCode stack to support native PowerPC binaries. EDIT: Can't watch the vid at work. Will have to look later....
I have to specify the architecture when producing a binary, and I know that my App wouldn't run very well on an emulator (my gfx engine is totally CPU, no OpenGL yet).
The iPad is an ARM Cortex-A8
-Edit- The iPad's CPU runs twice as fast as the iPhone 3GS... and a quick check on the internal timer in my App, shows that the code is running about twice as fast on the iPad as the iPhone.