I can debug either the watch app or the iPhone app in the simulator, easy enough.
Is there a way to have the debugger running for both simultaneously? This becomes somewhat of an issue when testing WatchConnectivity.
If you run either target, it replaces the other target in the debugger.
The WWDC talk Building Watch Apps discusses how to do this.
Basically select the Watch App as the scheme in xcode, hit build+run which will build the iOS app and WatchKit app, install the WatchKit app on to the Watch and attach the debugger to the WatchKit Extension. Then in xcode select the iOS app in the scheme selector and select the iPhone as the target device, launch the iOS app by tapping the app icon on the phone and in xcode in the menu bar select "Debug > Attach to Process" and select your app in the list. This should result in having xcode attached to both processes at the same time.
If you want to debug something early in the iOS app's lifecycle you can select "Debug > Attach to Process by PID or Name..." and type in the process name of the iOS app prior to launching it manually. This way the debugger will be attached right when the app launches.
Hope that helps