I haven't yet figured it out with Application Loader, but I figured it out, in a basic sense with xCode. As of this date, one must use xCode 4.5. After that there are two things you have to do before archiving, which will then allow the upload to the apple store.
(1) Go to Product Edit Scheme. Set Destination, located in the header of the pop-up, to iOS device. Click Ok.
(2) Click on your project and then go to Build Settings. Make sure that in Code Signing, for Release, you have selected iPhone Distribution (for Release and for Any iOS SDK under Release). You must have the Distribution Certificate already in place for this to work.
(3) Go to Product and select Archive. This will create the file that you will upload.
(4) Hopefully you have a successful build with no errors.
(5) You should then be able to upload to the App Store.
May the force be with you.