It's a mystery indeed. I've asked someone owning a 32 bit MacBook to test, and AO 2.0 launches just fine on that. I can't imagine XCode would just drop 32 bit PPC support and keep 64 bit support for Carbon apps either.
Oh well.
EDIT: Apparently it did just that:
Mac-mini:~ l66$ lipo -detailed_info /Emulation/Audio\ Overload\ v2.0/Audio\ Overload.app/Contents/MacOS/Audio\ Overload
Fat header in: /Emulation/Audio Overload v2.0/Audio Overload.app/Contents/MacOS/Audio Overload
fat_magic 0xcafebabe
nfat_arch 2
architecture i386
cputype CPU_TYPE_I386
cpusubtype CPU_SUBTYPE_I386_ALL
offset 4096
size 3073308
align 2^12 (4096)
architecture ppc970
cputype CPU_TYPE_POWERPC
cpusubtype CPU_SUBTYPE_POWERPC_970
offset 3080192
size 3194176
align 2^12 (4096)
The 2.0b9 version lists
Mac-mini:~ l66$ lipo -detailed_info /Emulation/Audio\ Overload\ v2.0b9/Audio\ Overload.app/Contents/MacOS/Audio\ Overload
Fat header in: /Emulation/Audio Overload v2.0b9/Audio Overload.app/Contents/MacOS/Audio Overload
fat_magic 0xcafebabe
nfat_arch 2
architecture ppc
cputype CPU_TYPE_POWERPC
cpusubtype CPU_SUBTYPE_POWERPC_ALL
offset 4096
size 3054440
align 2^12 (4096)
architecture i386
cputype CPU_TYPE_I386
cpusubtype CPU_SUBTYPE_I386_ALL
offset 3059712
size 2855212
align 2^12 (4096)
I'm sure you already know though. Knowing you didn't and never would specifically target ppc64 it's indeed a complete mistery.
Well, being unable to provide any more info as a generic user with no coding know how at all I'll just let this rest. G5 support works for me, and I probably get rid of that machine anyway before Snow Leopard arrives (which just may drop PPC support entirely according to the rumors). If Apple would have just announced the switch sooner I wouldn't have invested in that machine at all. That was a lot of money that went down the drain seeing how the PPC programs I wanted to use on it either cancelled or dropped support, also thanks to the PCI/PCI-X/PCI-e switch around that time. At least I don't have the PCI-X version. The 8 GB of RAM wasn't too cheap either back in 2005.
No, I think I just get a cheap Intel machine, and keep my G4 MDDs for work. They also run my OS 9 programs (sadly, many good apps never made it to OS X, they either died or went to Windows), making the G5 looking even more useless and pathetic. The Intel machines, on the other hand, can run Windows natively and safely. Might be worth looking into. [/rant]