you need the $100/yr (the $5 app used to be free)
it's still free for registered developers ($100/yr) but I only needed the compiler & co to work on a different project, not targeted on iOS. so i spent the 5 bucks as a one off payment for a nice tool.
Also I am not sure if you can take someones else .app file and sign it with your provisioning file.
On a second thought I am sure you cant.
Because the App id has to match the certificate which you get from the developers site (to which you have access only if you pay $100/yr)
seems like a no go at the moment. thanks for the clarification.