I downloaded xcode 4 and created a single view application with storyboard.
I added two views to the segue and tied them back to the home screen. After that I must have done something weird. The only thing I can think of is that I put the iOS simulator on the dock. I've updated the project and the changes are not being reflected on the simulator.
What I think is the issue is that I have two iOS simulators on the computer. For some reason whenever I try to find one in spotlight or in the applications it only shows one. When I click on it it is the old iOS simulator from Xcode 3. So what I did was I looked at stackoverflow and it suggested cleaning and running the project. That did not work.
After that I looked harder and found that I should reset content and settings on my new iOS simulator. That's what I did and now when I build and run it it is saying that it can't find my storyboard.
Generally you don't run simulator separately, but let Xcode fire it up for you. So, in Xcode, in the upper left corner you can select your scheme (and you select whether you want it on the simulator or the device). You can then select the simulator and then press the "Run" button and it should fire up the simulator for you. No need to fire the simulator up separately.
If Xcode is not behaving well (i.e. there are no error messages but the simulator never comes up automatically when you tell Xcode to run it on you simulator), I'd suggest (a) quitting and restarting Xcode (sometimes it gets in a weird state); (b) cleaning your project; and (c) try running it again.
In terms of not finding the simulator in Spotlight, it's now part of the Xcode.app bundle, so Spotlight won't find it. But if you want to dock it (not sure why, but feel free), just fire it up from Xcode by running an app on the simulator and when it appears in your dock, control-click on it and select "Options > Keep in Dock".