Nice, I've not heard of this before and I'm about to start the process of picking a code editor for my ipad.<p>I will say this, I wonder if Apple would approve it if you were running the code locally. They've certainly eased off in some respects about people running interpreted code locally for certain applications. The difficultly would be then building the interpreter in without a load of hacks and workarounds and spending lots of time for Apple to potentially say no.
I guess what I don't understand about all these "run $INTERPRETER in the cloud to avoid App Store restrictions" is that this seems like entirely too much effort to avoid one's choice of a $99 developer license or a jailbreak. I've personally been tooling around with HyperCard on my (non-jailbroken) iPad lately, which took about five minutes with Google, ten minutes with Xcode, and five more with the System 6 Finder to get installed.