Official documentation quote:
"An iPhone application should be internationalized and have a language.lproj directory for each language it supports. In addition to providing localized versions of your application’s custom resources, you can also localize your application icon (Icon.png), default image (Default.png), and Settings icon (Icon-Settings.png) by placing files with the same name in your language-specific project directories. Even if you provide localized versions, however, you should always include a default version of these files at the top-level of your application bundle. The default version is used in situations where a specific localization is not available."