Why Xcode Can't Find My Connected Device

There are many ways to fail launching an application in your device. This was a new one!

iPhone is running iOS 4.1, but project "Deployment Target" is set to 4.3. As result this project does not show your device in Scheme list. Switch to another project with a compatible deployment target and your device is on the list!

Xcode4 completely failed to help debugging this case, in all possible ways.