Can the iPhone SDK take advantage of the iPhone's proximity sensors? If so, why hasn't anyone taken advantage of them? I could picture a few decent uses.
For example, in a racing game, you could put your finger on the proximity sensor to go instead of taking up screen real-estate with your thumb. Of course though, if this was your only option, then iPod touch users wouldn't be able to use the application.
Does the proximity sensor tell how close you are, or just that something is in front of it?
There is a public API for this. -[UIApplication setProximitySensingEnabled:(BOOL)] will turn the feature on. BTW, it doesn't seem to be using the light sensor, because proximity sensing would tweak out in a dark room.
However, the API call basically blanks the screen when you hold the phone up to your face. Not useful for interaction, sadly.