Thanks for the kudos on the iPhone app developer interviews, I've both been enjoying connecting with the developers of some of my favorite Apple iPhone applications, but have also been learning quite a bit from them too.

For example, two weeks ago I would have said "no, there's no solution" when presented with the question you submitted. Now, however, I know that there is a way to have an iPhone app with a price tag and still make it authorize for a small number of friends and app reviewers. I'll explain how to do it, then you might conclude that it's easier to just Paypal your friends the few bucks and let 'em just buy the program...

The solution is something called ad hoc distribution and it's based on your phone's Unique Device Identification Data. Is it your phone's Serial Number, IMEI or ICCID? No, that'd be too easy. In fact, one of the easiest ways to ascertain your UDID is to actually grab the iPhone app UDID Helper and let it email you with your ID. Weird, eh?

Here's what it looks like:

Now, as the developer, you need to go into your code and make a few tweaks, including having a full list of the UDID of everyone you want to authorize (max limit = 100 UDIDs, btw). Here's a nice reference article: Beta testing on iPhone). If that doesn't work, iPhone Atlas has some good stuff too: info on Ad Hoc iPhone apps.

Finally, my colleague who is in the depths of iPhone app development added this note:

"There's a limit of 100 beta testers to whom we can send our app to. The challenge we've encountered, is assuring our beta testers that the UDID will not give us access to any of their personal data or files."