The new MacRuby 0.5 runtime is built upon LLVM, a compiler infrastructure also sponsored by Apple. Thanks to LLVM, MacRuby is able to transform the Ruby abstract syntax tree (AST) from the parser directly into highly optimized machine code. MacRuby supports both Just in Time (JIT) and Ahead of Time (AOT) compilation. The JIT mode will compile down the code at runtime, and the AOT mode will allow you to save on disk the compilation result. AOT compilation makes MacRuby a true Ruby compiler.

Technically speaking, these do appear to basically be within letter of the SDK agreement, modulo the fact that Adobe appears to making private API calls. They should be able to do what they need to without making those calls, so ultimately that should be a non-issue.

Now, the notion that what this thing emits is indistinguishable from something Xcode emits is laughable. They are very different, and not in a good way. While the apps may get acceptable frame rates on an iPhone 3GS, they don't on earlier hardware, and they almost certainly uses substantially more power battery than native games.