The restriction of 1024x1024 as the largest image for an iPhone is a problem with iPhone 4. However if an @2x image is used with maximum dimensions of 2048x2048 everything looks equally good on the 4 as it does on a 3 - tried and tested in simulator and device. Question is, does the image dimension restriction relate to the UIImage or the resource that it contains? I can't imagine resources of more than 1024 pixels are discouraged with the 960 pixel height of the screen.
The right answer is really to use tiles so that things look even better, but the deadline for for this deliverable is too close - it's a future thing.