PhoneGap, as I understand it, does not compile HTML5 code, it will put it in a beautiful box.
This is practical because it allows you to use your existing set of skills, but it is inconvenient to work with a web application, although you increase your capabilities a bit by opening your own API through PhoneGap.
You will not have problems listing on the Marketplace, several applications do this already and have no problem. However, it really depends on your ultimate goal. If your application is basically a form tool, your computing needs are low, and that's the way to go. If this is a marketing tool, this is probably the same. However, if you need to do serious math or animation, gain access to some hardware functions (for example, create overlays on video in real time using GPS information and control the accelerometer), you will need to use the Java API (and possibly even the NDK ) to make it manageable and usable.
Of course, you can do awesome things with HTML5, but it really is a matter of computational power, interpreted and compiled and optimized. So again: it depends on the type of application you plan to build.
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