Working in GIMP I made the background in the same way as this post but changing the starting colour from black to a rusty red. Check out the Path website to see why. For convenience I created a new document template using the iPhone 4 screen resolution and PPI (960-by-640-pixel resolution at 326 ppi) Just create your document then (File > Save As Template).
I did the kitty illustration in Inkscape and exported the bitmap. I dragged it into GIMP and gave it a drop shadow (Filters > Light and Shadow > Drop Shadow). Done!