An .ipa file is an iOS application archive file which stores an iOS app. Each .ipa file includes a binary for the ARM architecture and can only be installed on an iOS device. Files with the .ipa extension can be uncompressed by changing the extension to .zip and unzipping.
Most .ipa files cannot be installed on the iPhone Simulator because they do not contain a binary for the x86 architecture. To run applications on the simulator, original project files which can be opened using the Xcode SDK are required. However, some .ipa files can be opened on the simulator by extracting and copying over the .app file found in the Payload folder. Some simple apps are able to run on the simulator through this method.