My comments as posted last month when Apple first filed this suit are here: http://news.ycombinator.com/item?id=2352076 (analyzing the pertinent trademark issues in some detail).
An argument that I'm surprised nobody has realized is the fact that "killer app" was in general parlance way before the iPhone was released (at least a decade). This is killer evidence that app was a generic term way back when Apple was struggling to sell plastic purses.