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Another followup:

I finally got everything working. As far as Apple is concerned, I had to uncheck OF in the list of apps on iTunes, sync, then recheck and Sync Again. This blew away all data on the iPhone. Since I was only just getting started, this was not a problem for me, but if I were someone who only had a DB on the iPhone, and lost all my data, that would have been a huge bummer.

Next on to OF. I finally got syncing working with WebDAV, but only with a trusted Cert. The untrusted certs still kept popping up "Cancel" dialogs, even with 1.0.1 and so I finally gave up switched to another server with a trusted cert. Not ideal.

Now that it is all working and installed, it appears to work pretty well.

My sense is that one would never want to use OF on the iPhone without syncing back to a server. Otherwise the risk of loss, theft, accident, or just a messed up sync or bad update from Apple could cause one to lose all data. Scary. Much better to be synced up to a desktop DB where backups are frequent.