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I'm pretty sure that that's meant to apply to music/video bought from iTunes, not the use of boughten apps

That's not what Apple say (if you believe this blog):

http://ursecta.com/wp/2009/08/anything-but-games-are-illegal...

A quote from one of the linked articles (The Register) at the bottom:

"Apple is reminding customers that applications sold through the iTunes store are strictly for non-commercial use: business use is forbidden, which makes one wonder what that section of the store is for."

There are quite clearly a large number of applications in the app store that only have a business use. Apple have happily allowed them in the app store.

I'm sure this is taken out of context.

Notice that the Apple rep makes absolutely no mention of applications. I feel that there is a big misunderstanding going on here.

Oh, possibly. The entire conversation with Apple was based around the author of the post purchasing an application though. He repeats that point several times.

Perhaps the situation has been clarified since then.

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