I had some severe problems trying to setup an iPad app I built using PhoneGap in XCode 3.2.2 for Ad-Hoc deployment. I primarily followed the instructions from the apple website here:
The problem I had was that in project properties there was no option to set an Entitlements file. This is usually found in Project Settings under the Code Signing heading with the title "Code Signing Entitlements". This is not under project settings when creating a new PhoneGap project in XCode, but does exist when creating a new iPad XCode project.
In order to get Ad-Hoc provisioning to work you will need to go to the project settings menu. In the bottom left hand corner click on the icon and select "Add User-Defined Setting". For the title you will need to use "CODE_SIGN_ENTITLEMENTS" and for the value "Entitlements.plist".
Once you have done this you can follow the instructions from Apple just fine.