Now that I've taken the plunge and moved to XCode 4.x from XCode 3.x ... I had a really weird problem trying to build my iOS projects for the simulator.
The builds failed with an error related to the i386 architecture. I simply couldn't figure-out how to solve this directly with the XCode IDE.
Luckily, I did manage to figure-out a fix: my solution was to edit the project.pbxproj files by hand with vim, and remove a handul of fixed definitions of VALID_ARCHS ... which presumably were legacies from previous XCode versions. This is not the first time that I've been forced to fix XCode projects by hand!