The program being debugged is not being run.
Everyone sees this once in a while during Xcode development for iPhone apps. And there are a million reasons and hacks that make it go away.
Here is the definitive one:
You cannot debug an iPhone app signed with an Ad Hoc Distribution cert.
Let me say this again.
You cannot debug an iPhone app signed with an Ad Hoc Distribution cert.
So if you're getting this error, you've probably misconfigured your cert signing (in my case, I made all configurations - Debug, Release, Distribution - use the same cert).
Solution is to change your cert to be a matching developer cert.
Hat tip to this URL, which has this buried among a million other "fixes"