Due to the potential for abuse, dynamic libraries aren’t allowed to be used in iPhone applications that are to be sold on the iPhone App Store. The downside to this is that it makes it harder to share libraries that you develop with other developers without giving up the code.
It’s not impossible to share a binary of some of your code, however! iPhone Developer Brian Stormont has written a tutorial on building static libraries with the iPhone SDK. He had developed a streaming audio library that he was willing to share (without source) with a client and compiled it into a static library so that they could link it directly into their own app.