Aeolius
Adventurer
What do you WANT the application to do?
Babysit 8 kids, so I can run my game?

If we re considering the iPhone/iPad/iPod Touch market, then I would recommend that the proposed “live character sheet” use Apple’s Game Center app to help coordinate players and their DM in a shared gaming session.
I would also make the app expandable. A third party publisher should be able to plug their races, classes, and so on into the character sheet with ease.
Aside from that, simply supporting existing apps such as MapTool and PCGen would help a great deal in not only running a tabletop game but a VTT as well. No need to reinvent the wheel, here, as WotC has attempted, unless of course you wish to implement true three dimensional tracking into your VTT.
Perhaps Paizo could also partner with DAZ3D, makers of 3d models and the free character modeling application Daz Studio, to offer customizable character models that players could use for character sheets, avatars, and the like. Again, a proprietary application is not needed, when an existing one will do. All that would be needed are models and tutorials.
Another no brainer would be to offer the Pathfinder RPG books as not only PDFs but also in ePub format, so that iPad users with the iBooks app can annotate, bookmark, and highlight as they see fit. The latest version supposedly handles "fully illustrated books, from children's picture books to beautifully designed art books...". Also, while I see several works of Pathfinder-inspired fiction in the iBookstore, having the rulebooks in there might grant additional exposure.
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