There's a great tutorial at Apokalypse Software for getting the iPhone 2.2.1 SDK working on a PPC Mac (up until now, doing development for the iPhone meant getting an Intel-based Mac). It takes some work, but nothing that will pose a problem for most developers. Before you begin, remember that you must have 6GB of disk space available. Also, if you've tried to install the SDK on your target volume before, you'll have trouble until you uninstall Xcode with /Library/Developer/3.1/uninstall-devtools.
If you don't want to go through the hassle, you can buy an installer for just $5. As a guy who still uses his G4 iMac, I understand the appeal of using an older Mac.