Late last year, iOS game developer Two Lives Left released Codea [$9.99 (HD)]. Originally known as Codify, Codea offered developers everything they needed to rapidly prototype an iPad game… On an actual iPad. Codea has come a long way since then, and today, the first game developed entirely inside of the app has been released.
Cargo-Bot [Free (HD)] is a puzzle game where players program a robot to move crates around. 36 levels in all are included, there's a 3 star grading system, and you can even record solutions to upload them to YouTube.
Cargo-Bot is free, and worth a look to see what's possible inside of Codea. According to the Cargo-Bot site, the Codea Xcode Template used to convert the Codea files into an actual game that can be submitted to Apple will be released soon. Neat!