I have reached the first tiny milestone... a playable prototype. So I have a train and I can move it about and kill enemies. There is no lose condition yet - the enemies will be stealing water from my water tower, but they don't yet. I'm very pleased with the progress though. This is clearly going to be a fun game, though there is a lot more to do.
My todo list is well over a page now, and this is a tiny project really.
What is amazing is how much faster the iPad2 is than I was expecting. I'm pusing about 480 models around at 60fps plus a reasonably number of particle effects. So that's currently 220 enemies with shadows, though I guess that means I can have afford a lot more trees and general interest items than I was expecting. Not sure how it performs on an ipad 1, but hopefully it seems to be playable at 30fps, so I'll continue to aim at iPad2/iPhone4 so it will look competitive on future hardware.
Here's a shot of the point where I maxed out my draw at 60fps. Note that everything has a shadow and everything is a full 3d model. I probably make a killing in that everything is untextured - so thats a lot less work for the gpu. But there are heaps of savings to be made (ie. I'm not even using VBOs yet).