Recommended sound bitrate for iPhone?

#1 Yes, WAV file playback is a lot cheaper on the CPU than MP3 decoding. I'd say go for the lowest bit rate that your sounds will allow. 22kHz is the lowest that sounds usually still sound "decent" at, but at half the memory savings, 11kHz may be an option.

We released Marble Blast Mobile with everything at 8kHz as there were a ton of sounds required (4MB at 8kHz... which would have been 11MB at 22kHz!), and while some sounds are pretty bad there, at the end of the day, what percentage of users actually listen to the sounds of an iPhone / iPod game? How important are sounds to your game? And is it worth it to take up that additional memory and download size?

Every game will answer those questions differently.

#2 About your question "is it still best to always use WAV files over MP3 files?"
I use WAV files for the sound effects, and MP3 for the soundtrack music (only one at a time). The soundtrack lasts 2 minutes, so the MP3 lets me compress the music better (better quality and less MB).

**Probably everybody wants to hear the sound effects (you want to touch and hear a sound at least), but less that 5% wants to hear the soundtrack music, so I don't loop it.**

#3 don't know ... after 5 minutes sounds get repeating anyway. if the sound is not used as an indicator for something (alarm as in flight control, or speed as in racing games), then its the first thing to disable as it costs battery I can save for longer play :)