Cast my vote for an open API. I'm looking at trying WebOS development, and I would LOVE to try a native geocaching app for the Palm Pre. Maybe there'll be an "official" one from geocaching.com someday, maybe not. I understand being protective of your business model, but surely some kind of arrangement could be reached. Think of how many more users would get interested in geocaching if they had easy access to it on the device of their choice, and you didn't even have to expend any effort to enable those myriad devices!
How about issuing a token to all registered users of the API (like Amazon does), and then only allow searches within a 50 mile radius for that token in any 30 minute period (or something similar)? That way no one could ever pull enough search data to compromise your database (any more than a Pocket Query could), but it would satisfy 98% of the use cases for a mobile user (e.g. "what caches are around me?").