You can now pretty much consider it confirmed: Apple's iPhone 2.2 update will allow direct downloading of podcasts to your iPhone or iPod Touch. That explains why the Podcaster app was rejected from the App Store a few months back: it violated Apple's policy of not duplicating functionality, though in Podcaster's case, that functionality was future over present.
(We won't go into how that policy doesn't make a lick of sense: there are, for example, numerous App Store programs that duplicate note taking functionality, yet Apple hasn't squeezed them.)
It seems that the same restrictions that are on Apps apply to podcasts: there's a 10MB size limit. It'll be interesting to see how that shakes out with podcasters: there's numerous podcasts I subscribe to larger than 10MB. Will podcasters start supplying lower-fidelity casts to be iPhone compatible, start breaking up their larger episodes into 10MB chunks, or tell iPhone users to go screw and use iTunes like everyone else?
Podcasting on iPhone 2.2 [Flo's Blog]