Unlike what he heard yesterday, it appears the Apple A4 processor is not really a custom-design chip, most of what's inside the chip appears to be ARM IP. Bright Side of News did some digging and discovered that the chip is a SoC that features the ARM Cortex-A9 MPCore, the same chip used in the NVIDIA Tegra and Qualcomm Snapdragon, along with ARM Mali 50-Series graphics and some other functions like the memory controller.
The A stands obviously for Apple, and the difference between the Samsung processor inside the iPhone 3Gs and A4 is the clockspeed and the core type. A4 runs at 1GHz while the chip on iPhone 3Gs works clocked to 0,6GHz. This is one of main reasons why iPad can deliver a lively interface compared to stale iPhone one.
So yes, PA Semi/Apple chip is actually mostly ARM IP. This is quite a logical step to do, given that this is first new piece of silicon that came from PA Semi after the acquisition in April 2008. We'll see if future iterations will have more Apple IP than ARMs, but somehow we doubt it. ARM is the pervasive force in the world of mobile chips, as witnessed by many new players on the market. We could even conclude that Apple logically followed what nVidia had done with their own SoC, Tegra, followed Qualcomm with their Snapdragon, Samsung with their own Cortex-A9 core at 1GHz. BTW, as a small comment - isn't it interesting how everybody is clocking the A9 core to 1GHz [nVidia, Qualcomm, Samsung, Texas Instruments]? This is due to the thermal sweetspot of the core, given that the maximum achievable clock of 1.3 GHz comes with a significant thermal penalty.