Basically this allows side loading of business apps to approved business of a large (500+) size. I'm not sure if the apps need to be approved by apple still, but I'm guessing they would.
That is true. I could be wrong, but I personally feel that Apple is being difficult on purpose. I do not think they want the iPad to become a business device (or be a company that produces primarily for businesses). I think they want to be recreational products company -- which works pretty well for them -- and not have to deal with similar problems that Microsoft with business issues.
I won't be at all surprised if the Android tablets have a similar look & feel to the iPad, but intended for specialized work as opposed to media consumption. I imagine the customization capability of an Android (or other OS) tablet would allow for simple, specialized devices that succeed.
I could be entirely wrong about Apple's paradigm and the resultant prospects. I disagree with many of Apple's decisions, but no one can deny their success over the past few years (though their stock is overvalued right now imho).
I believe they're trying to make 100% sure there is not a legal way to get around the Appstore ecosystem, that way they keep their 30% of all sales. If they have to sacrifice b2b apps, I think they're fine with that.
Android is still ultrafragmented, and none of the tablets are out yet (nor will necessarily be that good when they come).
Half the iPad development I'm seeing looked for is for B2B apps, not consumer apps.