I've seen GameSalad around before (they had a big booth at this year's MacWorld, and we've mentioned them here on TUAW a few times), but I've never actually spoken to anyone who works for the Austin, TX based company. Fortunately, senior platform director Michael Herring found some time to come say hi at WWDC this week, and he spoke with me about the development system that hopes to bring iPhone and iPad app creation to everyone.
He did walk me through the app quickly, but since it's a free download over on their website, you can go see it for yourself if you want. The idea is that you set up a series of "actors," and then you add a set of rules for those actors (what happens when they touch or get directions from the keyboard, etc.) that will eventually make up a full game. GameSalad doesn't actually require any coding knowledge, but Herring told me that it did require a little bit of know-how in terms of how games work. You can easily make a game system with the app (and even veteran developers often use it for quick prototyping), but to actually make a working game that people will want to play, you'll have to bring your own trial-and-error patience and balancing effort.