What is the 'correct' way to identify the currently active application in OSX 10.6+?

Polling every second or so to find out the current application is inefficient, and is the wrong way to go about this. A much better approach it to simply set your process up to receive the NSWorkspaceDidActivateApplicationNotification notification.

@interface MDAppController : NSObject <NSApplicationDelegate> {
    NSRunningApplication    *currentApp;
}
@property (retain) NSRunningApplication *currentApp;
@end

@implementation MDAppController 
@synthesize currentApp;

- (id)init {
    if ((self = [super init])) {
        [[[NSWorkspace sharedWorkspace] notificationCenter] addObserver:self
                      selector:@selector(activeAppDidChange:)
               name:NSWorkspaceDidActivateApplicationNotification object:nil];
    }
    return self;
}
- (void)dealloc {
    [[[NSWorkspace sharedWorkspace] notificationCenter] removeObserver:self];
    [super dealloc];
}
- (void)activeAppDidChange:(NSNotification *)notification {
    self.currentApp = [[notification userInfo] objectForKey:NSWorkspaceApplicationKey];
    NSLog(@"currentApp == %@", currentApp);
}
@end

int main(int argc, const char * argv[]) {
    NSAutoreleasePool *pool = [[NSAutoreleasePool alloc] init];
    [NSApplication sharedApplication];
    MDAppController *appController = [[MDAppController alloc] init];
    [NSApp setDelegate:appController];
    [NSApp run];
    [pool release];
    return 0;
}

Your problem is that your application is unable to receive any events from the system informing it that the current application has changed, and therefore it never updates the active property on the NSRunningApplication instances. If I use the exact same code, but another app is active when I start running the code, it reports that application instead.

If instead you change your code to run the main thread's NSRunLoop and use a 1-second timer, it should work.

Here's a quick example:

#import <Foundation/Foundation.h>
#import <AppKit/AppKit.h>

@interface Foo : NSObject
- (void)run;
@end

@implementation Foo
- (void)run {
    for (NSRunningApplication *currApp in [[NSWorkspace sharedWorkspace] runningApplications]) {
        if ([currApp isActive]) {
            NSLog(@"* %@", [currApp localizedName]);
        } else {
            NSLog(@"  %@", [currApp localizedName]);
        }
    }
    NSLog(@"---");
}
@end

int main(int argc, char *argv[]) {
    NSAutoreleasePool *p = [NSAutoreleasePool new];

    Foo *foo = [[Foo new] autorelease];
    NSTimer *timer = [NSTimer scheduledTimerWithTimeInterval:1.0f
                                                      target:foo
                                                    selector:@selector(run)
                                                    userInfo:nil
                                                     repeats:YES];
    [[NSRunLoop mainRunLoop] run];

    [p release];
}

As of OS X 10.7 NSWorkspace also has the convenient method:

- (NSRunningApplication *)frontmostApplication;

Also you could now use Grand Central dispatch calls to make repetitive calls with timeout.

Something like this:

- (void) checkFrontmostApp {

    double delayInSeconds = 2.0;
    dispatch_time_t popTime = dispatch_time(DISPATCH_TIME_NOW, (int64_t)(delayInSeconds * NSEC_PER_SEC));
    dispatch_after(popTime, dispatch_get_main_queue(), ^(void){
        NSRunningApplication* runningApp = [[NSWorkspace sharedWorkspace] frontmostApplication];
        //do something
        NSLog(@"frontmost app: %@", runningApp.bundleIdentifier);
        [self checkFrontmostApp]; //'recursive' call
    }); 
}