Update: It is worth mentioning that there are applications with a free, ad-supported version available and yet the premium version is still cracked. One such example is The Iconfactory's excellent Twitter client, "Twitterrific."
Let's say you are a developer and want to have a go at this whole "iPhone" platform. Let's also say that you lay out the money to register with Apple, spend about 250 hours to develop an addictive and entertaining game, and manage to get it approved for sale in the App Store.
If you have made it this far, as James and Constance Bossert of Fairlady Media have, then you probably would be excited to see a sudden spike in application usage... but according to a post at TorrentFreak, that was only the beginning of the Bosserts' problems. When usage shot up for their app "Whack 'em all" (iTunes link) without a corresponding increase in revenue, James went to work figuring out why. The bad news: his app had been cracked and was being distributed, for free, for use on jailbroken devices.