I was under the impression that all of the testing was done via a virtual iPhone application within the OS X environment. Obviously there is some porting method within the SDK, which only makes sense. The question I have now was whether any of the applications your brother wrote violated any of Apple's guidelines for Apps. If so, then the only restriction is the actual App Store itself and the development software allows violating Apple's rules. ANYBODY KNOW FOR SURE? However, since Apple neither condones nor supports violating their guidelines, you may well have more problems than if you jailbreak your iPhone. Also, unless you wipe your iPhone clean before any AppleCare service, the presence of the unauthorized application would void your warranty – and you may not always be able to wipe it when something goes wrong.
Besides, Zydeco already answered this earlier.
My understanding that for those who follow the procedures, the jailbroken iPhone actually runs better than Apple's software, depending on what you need it to do, ad restoring it to Apple's software introduces no new problems than Apple's software is already full of. I make this point so as not to let your fear be interpreted as fact by someone casually reading this. Jailbreaking one's iPhone causes NO DAMAGE whatsoever. You are at greater risk trying to run an unauthorized app under Apple's software.