I fixed it, you do the following
1. After downloading the iPhone SDK Beta 2, run the installer and let it install what it will let you.
2. Open the “Packages” folder from iPhone SDK disk image, and manually install all of the packages with the “iPhone” preface.
3. After installing all of the iPhone packages, there should be a “Platforms” folder in the root of your hard drive (or where you chose to install them). Move all the contents of this folder to the /Developer/Platforms folder on your hard drive.
4. Launch Xcode, and you should be presented with the iPhone options as before.
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