iPhone applications can offer settings that define preferred application behaviors or configuration options users can set to change some functionality of the application. Settings that define preferred application behaviors… are accessible in the built-in Settings application. Configuration options should be available within the application context…
Apple seems to highly recommend that the Settings of any application that runs on your iPhone/iTouch be put in the Settings application, whereas any of the other ‘configuration’ options be included in the application interface.
Users already using apps the Weather and Stock apps already know how the configurations are there on the backsides. However, in apps like Mail, the Settings app is used to control most of the account settings and configurations. If you find this discrimination between the settings and configurations of these apps then think about it. You will obviously change the weather/stock preferences more frequently than compared to email account/other mail preferences.
Furthermore, there are two common problems regarding the Settings of any app on iPhone interfaces. The first one is a technical issue – third party apps are not allowed any code execution inside the Settings app, leaving them handicapped and paralyzed. The second problem is – developers are increasingly foregoing the Settings app entirely, dumping all configurational preferences inside the application. Unless it is for an executable script, this practice is wrong and often sets a bad standard.
Here’s what John Gruber had to say on the very first day:
…if most third-party apps display their settings screens themselves, then when users do encounter an app that uses the system-wide Settings app, they’re very likely to assume that the app simply doesn’t have any settings.
It’s the onus of the developer to include the settings of the application in the Settings application of the iPhone – unless it involves an executable. Moreover, if you want to better SDK, then file a Radar. In fact, it is recommended even by Lucas Newman to reference Radar #6268602 if you have a problem.