Have you tried editing the Scheme? (I'm assuming you are running XCode 4). I believe you just might need to set the "Base SDK" setting to "iphoneos" (this translates to "Latest iOS").
I've just got this error, for me it was because of some reasons my device name didn't appear in xcode devices dropdown, just a generic name. Unplugged and plugged back the device and was fine.
The above solutions didn't work for me because Xcode 4 didn't give me any choices to go back to iOS. I closed Xcode, opened it again, and then it worked!
I just installed Xcode 4.1 (painful!) and when I opened one of my apps that built fine before the upgrade, the only active scheme was "My 64-bit Mac". In this case, the required change was to Edit Schemes, and for the Build scheme's Info tab, set the Executable dropdown to my target. It was set to None. As soon as I did that, the simulator/device showed up instead.
I got same error and for some reason after going through all these it did not work. Notice in the very top menue is had my App Name> IOS Developer. Changed to App Name> IPhone 5.0 and went right into Simulator and got no error.
I've hit the same issue, needing to build with the 10.6 SDK. But I've found that XCode 4.4 doesn't contain this SDK! So I had to put it back, by opening the XCode.app package contents, and going to:
XCode.app/Contents/Developer/Platforms/MacOSX.platforms/Developer/SDKs
and copying in MacOSX10.6.sdk from my old XCode 3 Developer folder.
Surprisingly enough, this works! When you quit and relaunch XCode, and select the Base SDK for the project, 10.6 appears in the drop-down.
But beware, when XCode installs an update, you'll have to repeat this process, as I found just now after updating to 4.4.1.