Straight to the point. Is this normal?
As you can see, this is the release section of the signing. I'm choosing a distribution provisioning profile, yet it's complaining about the profile missing a development certificate! I was expecting "iPhone Distribution" instead of "iPhone Developer".
Also, it's listing the development provisioning profile as eligible! Can this happen? I mean a provisioning profile eligible in the release signing?
Am I missing something so obvious here?
I'm choosing a distribution provisioning profile
Well, don’t. That’s wrong. You use a development provisioning profile for all build and run, and archive, operations — regardless of whether you are running on simulator or device, regardless of what the build configuration is (release or debug).
Distribution profile is purely for distribution (e.g. re-signing when exporting an archive up to the App Store).
Also, you should use automatic signing throughout the process; it knows more than you do (I say that in a nonpersonal way; it knows more than I do too!)
So, to sum up:
Use automatic signing.
Even if you use manual signing, use the development profile for everything in the interface you showed in your screen shot.
This is what the configuration for automatic signing looks like:
Here is how it configures your actual settings:
Notice that it uses the developer certificate, not the distribution certificate, for all configurations. If you must use manual signing, that is what you want to do too.
You won't need the distribution profile until a much later step in the process, when you export from an existing archive in the Organizer window, and at that point you'll be using a completely different interface. You can use automatic signing there too (though you don't have to).