Can you test your iPhone apps on the iPad using the developer tools?

You need both. But if you’re just getting your feet wet, then you could start with one device first. Selling software you’ve written without ever testing it on the device it’s for is analogous (although a bit more lethally so) to selling airplanes without having test-flown them first.

So you can’t run iPhone apps on the iPad unless they’ve been installed from the app store?

You can run iPhone apps on the iPad the same way you do on the iPhone, so long as you’ve provisioned it. By default, if you’re working on an iPhone only app and run it on the iPad, you’ll see it in the center o the iPad screen. However, it’s easy to make it full screen.

Here’s how I’ve been doing it:
1. Create a copy of your entire folder for your app. As far I know this process is not easily reversible (though I haven’t looked into it that much).
2. Open up the copy of your app in Xcode.
3. In the lefthand nav column, highlight your Target.
4. In the Project menu, click on Upgrade Current Target for iPad…
5. Select either Universal if you want to use the same XIB files for both or the other option if you want a separate set of XIBs (Interface Builder files) for the iPad UI. For simplicity while first exploring the options, I’ve used Universal. Universal apps sell on the store for one price which gets access to the app for all devices.
6. Connect your iPad and run the app, same as you would on your iPhone.
7. The UI should now be full screen but you’ll have tonmake aduatments using autoresizing masks, etc. Also this was a quick and easy way to upgrade but in many cases you may want to completely redesign your UI for the larger screen.