Can't Access Apps Store, but iTunes Works Fine

My friend and I bought the new 3G iPhones over the weekend. I'm able to download apps via the Apps Store icon .. no problem. When she does it on hers, it says that her AOL ID is invalid - even though she can hit the icon for iTunes and get in just fine (or log in via my computer). Her iTunes account has a valid credit card on file and, as I said.. she can get into iTunes fine.

Her computer isn't working, so.. she can't synch with the Apps Store on her PC. I'd let her do it on mine, but.. I'm not sure if they'll work. Any idea why she can't get the Apps Store to recognize the same ID's that iTunes does?

I'll try having her sign up for an Apple ID, but.. I don't know.

Note: It didn't work, so she took it back and they gave her a new one, but this phone doesn't work either. It's just the Apps Store. Everything else is cool.

Note.. I had read that maybe it was the new terms of service, so I logged into iTunes on my computer as her and agreed to the TOS, then downloaded a song to test it out. Everything should be ok. It must be something simple.

Oh.. I should be clear.. I'm talking about the icon on her phone .. not the PC