What warmi said. Some physics engines might handle variable timesteps but most if not all provide a better simulation and might even run more efficiently when using a fixed step. Continuous collision can be very expensive, so even if your physics engine can do it you wouldn't necessarily turn it on for an iPhone game. CCD and fixed steps aren't mutually exclusive either - I'd still use fixed steps when using CCD 'cause they just make everything easier - AI, networking, demo recording, etc. can all benefit from fixed steps.

Here's the article I always point out when someone asks about fixed time steps (explains things better than I can): http://gafferongames.com/game-physics/fi...-timestep/

I should also note that this thread is pretty old and so is the code I posted - I no longer use NSTimer for one, but I still separate the logic/physics step from drawing 'cause that's just good for everybody.