The iOS Simulator allows us to test on devices that we may not have, and is useful for quickly deploying tests in an accurate environment for compatibility checking.
The iPad apps available at launch were built entirely using the simulator, as developers were unable to get access to the physical devices before they went on sale.
To use the iOS Simulator to test on iPhone and iPad, you need to install the iOS SDK from Apple, which is included with Xcode. An SDK is a Software Development Kit; it contains the tools needed to build and test software for a specific platform.
Xcode is available for download either from the Mac App Store or manually from the developer portal. The Mac App Store is preferable but is only available in later versions of Mac OS X. Let's take a look at installing with the Mac App Store and how to get Xcode manually if it's unavailable.