Apple Bluetooth Keyboard used with the iPhone

Actually that is how you get this whole thing working. I too was working on a bluetooth game pad that uses the same software method as this person.

A program runs that talks to the keyboard, since the iphone itself does not have the right stuff in its bluetooth stack.
That program also opens a VNC connection as a client, to the VNC server you see running on the phone (Which is installed via cydia)

As the keyboard sends say the letter ‘A’, the program interprets this and sends a ‘A’ keycode, just like any VNC client can.

In my case, i wanted to map each joypad action (up down A B start etc) to ‘taps’ on the screen. My interpreter app did the same thing with my hardware, then sent ‘mouse’ events to the local VNC server.

Until Apple adds keyboard support to their own bluetooth stack, this is the only way to do it.