It’s your iPhone, and you can install apps if you want to.

Give a man a fish, and he’ll eat for a day. Give a man an iPhone, and he’ll be starved for more—more features, more apps, more speed, more capacity. Luckily, where there’s a ravenous iPhone user base, there are developers ready to serve up the kinds of apps users crave—but the path from kitchen to table became a bit less straightforward with the arrival of the official iPhone SDK and the grand opening of the App Store, set for early July—not to mention the iPhone 2.0 firmware update and the coming of the iPhone 3G. Before that, crafty developers had created a wide range of iPhone apps that only worked on jailbroken phones but allowed iPhone users to download podcasts directly to the phone, use Twitter, listen to last.fm, and much more.

The App Store announcement back in March presented developers with a difficult choice. Should they continue to develop for the phone on their own or come under Apple’s watchful eye?

Pre-July 11, iPhone users in Canada had no choice but to operate jailbroken phones, but Vancouver developer and iPhone expert John Biehler says he supports moving to the App Store after the iPhone 3G arrives in Canada.

“It’ll cut down on the janky apps that show up in Installer and could potentially damage the phone. It’s actually pretty easy to mess up your iPhone by adding unknown sources to Installer, and having Apple ‘bless’ them before publishing should make things a little safer,” Biehler says.

Erica Sadun, a technical writer who blogs for the Unofficial Apple Weblog, says moving to the App Store could be of great benefit to developers. “For $99 a year, you get free distribution,” she notes. “You want your work to be shown, and for that, the App Store will be extremely effective.”

Biehler adds that while access to the App Store comes at a cost, he expects the market to respond appropriately. “The fee might be a barrier initially, but I expect to see publishing houses pop up that will market their app under their ‘brand’ to the App Store for a cut of the profits.”

Biehler also speculates that while many of the more complex apps and games will be available for a fee, others might come at low or no cost. “There will likely be a lot of apps available in the store that are free/open source, like most other platforms. As Palm and Windows Mobile developers can attest, you can’t charge a ton for your apps if you expect them to sell to a casual market,” he says.

But a split might emerge between those developers who choose to partner with Apple and those who continue to work on apps for jailbroken phones. Damien Stolarz, coauthor of O’Reilly’s upcoming iPhone Hacks, says he’ll continue to develop apps that require jailbreaking for the foreseeable future. “There are a number of things you just can’t do with the SDK,” he says. “Skype and VoIP are obvious examples. The App Store apps also don’t allow background tasks, inhibiting a lot of ‘Lojack’ type apps, like a friend finder, because the phone can’t upload location data in the background while other apps are running.”

Of course, the iPhone 3G’s GPS capabilities cover that base, but before the new-and-improved iPhone was announced, GPS was not a sure thing.

Videogame emulators are also out of the question, Stolarz adds, because App Store apps can’t run downloaded code.

But Stolarz notes that while he doesn’t personally plan to market his own apps via the App Store, he doesn’t object to Apple’s restrictions. “I understand Apple’s approach and I don’t disagree. But I can have my own goals, which don’t fit into Apple’s overall desire to keep their platform stable and pure.”

And with over a million jailbroken phones currently on the loose, Stolarz is confident that developers will be able to monetize their work even if they don’t go through the App Store. “There are dozens of iPhone shareware apps out there already,” he says.

In the end, iPhone users—not developers or Apple—will decide which route offers developers the best chance for success in the epic battle to secure space on the home screen.