Good news, my first app is up, and you can see it here:
iTunes link

The interesting bits for fellow developers:

• compiled with Titanium mobilesdk 1.3.2 and XCode 3.2.3 (supports iOS 4).
• although I used a wildcard app ID when I was debugging, I decided to try a specific app ID during packaging, I don't know if that is required but it worked for me. So if my wildcard ID is ABCDEFG.*, then I used ABCDEFG.com.mycompany.myapp in final packaging.
• although Titanium found all my certificates just fine, and created a package that looked OK to me, it would not upload to the app store, see this question about entitlements.plist and note that the answer by John Hass did not work for me.
• my app name in Titanium does contain spaces, and this is not a problem. Just the binary uploaded to Apple cannot contain a space.

I think that the Titanium team doesn't want us to need to open XCode, but I could not figure out any other way. Your mileage may vary, and by the time mobilesdk 1.4.0 is released these instructions may be obsolete. With all that, if you want to try my steps, here is what I had to do:

• develop and compile as normal with Titanium
• close Titanium
• open XCode and open up the PROJECT NAME.xcodeproj that was generated by Titanium
• Click on project name, get info, and go to configurations tab
• copy the Release configuration into a new Distribution configuration
• click on build tab and switch to Distribution in the drop-down
• under Architectures, Base SDK = iPhone Device 4.0
• under Code Signing, Code Signing Identity = the distribution certificate
• under Deployment, iPhone OS Deployment Target = iPhone OS 3.0
• under User Defined, ensure TI_APPID is the full ABCDEFG.com.mycompany.myapp
• finally under the Build menu, click Build and Archive
• find the compiled application in the finder, and ZIP it up
• remove spaces from the ZIP name
• upload to itunesconnect

It took 9 days from application submission until approval.

Todd