Yes, AIR-based applications are accepted on the App Store if they meet the general requirements. Applications are no longer rejected because they are not developed using "Objective-C, C, C ++ or JavaScript executed by the WebKit engine for iPhone OS", this request has been deleted.
There are quite a few games developed using AIR in the App Store, such as MeteorStorm, Gridshock, Chroma Circuit, and Pyramix (Pyramix was โfeaturedโ by Apple, see http://blog.theflashblog.com/?p=2740 ).
In most games, I donโt know many non-gaming applications, except for TouchUp Pro - Photo Editor, http://itunes.apple.com/app/id439242122 , which is also one of the "recognized" applications.
source share