Based on this news release from Cisco is seems there has been a lot of discussions going on between the two companies and the Jobs keynote has basically committed Apple to agree to the Cisco terms for the use of the trademark.
I can sense that some lawyers have been working very long hours and will continue over the coming few weeks to sort this one out.
Update: Time has a great article showing why the iPhone is different. But there are a few things missing these have been documented around the place, some in the Time article others which of course I have not bookmarked! Some are lack of enterprise support, lack of ability to sync wireless, lack of wireless downloads across the network, no 3G support. All will be solved and Apple will most likely make a killing out of these little things.