After hours upon hours of testing I can say that c2 DOESN'T work on the iPhone with the latest phoneGap (1.5.0).
On the simulator it works perfectly, once built and sent to the device it does not, and it's a construct problem, it looks (say it looks because it's IMPOSSIBLE TO DEBUG) like something throws an error and the screen remains blank. I tried to remove any reference to c2 and the "Your browser doesn't..." string appears perfectly (so no memory problem as all the assets are still in the app.
Someone has any idea about this? @Ashley, how do I debug c2? Possibly with some try catch blocks? Has someone been successful on testing ON the actual device (not on the simulator)?