I have been using the new 'Build and Archive' feature of the latest Xcode 3.2.3. I like it.
Now I noticed that it is always disabled for some reason. I can't seem to figure out what I changed to cause this.
Had been messing around with this for quite some time too. Don't forget to click on 'Validate Settings' at the bottom after you've checked the 'Prerendered' tickbox in the summary tab. And if you're deploying your app to the iPhone or iPad, make sure you delete the app first and then build it again. Otherwise your icons will still be the same.