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Lua is definitely out, and has been out for longer: Apple explicitly prohibits embedding interpreters, like the Lua interpreter, in your apps.

Yet Rovio Mobile's Angry Birds (#1 paid app...) clearly (there are lots of .lua files) embeds a lua interpreter.

How about the Corona SDK (http://anscamobile.com)? They use Lua, but they claim they're allowed by the pre-4.0 SDK. I don't know how it works behind the scene, but I think they were allowed because the SDK didn't allow you to load code on runtime (e.g. think about a C64 emulator), but as long as the code was fixed it's fine. It can't execute arbitrary code because the app signing process ensures that the only code that runs is the same code submitted to Apple.

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