Two graphic novels were rejected from the iPad due to sexual content, Ulysses “Seen” and a graphic novel version of The Importance of Being Earnest (Amazon link, no affiliate info).
One thing I’ll emphasize, first, is that Apple does have every right to control content that they distribute.
However, the content in both of these graphic novels wasn’t intended to be pornographic in nature.
The publishers were willing to work with Apple, to get their novels published. In the case of Ulysses “Seen”, some panels had to be completely redrawn – even pixelation or fig leaves weren’t sufficient. As for the The Importance of Being Earnest graphic novel, one entire page had major parts of the story blacked out, involving partial nudity (but no genitalia shown) of two male characters together.
Again, Apple has the right to control content they distribute.
However, a heterosexual sex scene was preserved in an approved comic, Kick-Ass. So that doesn’t fly. (The content in Ulysses “Seen” was completely non-sexual in nature, and less was shown in The Importance of Being Earnest.)
Apple did ultimately reverse their decision, and asked both publishers to resubmit their apps, but only after the uproar about their actions. (Yes, I’m slow to post this, sue me.)
Sources (possibly NSFW): Boing Boing, Gizmodo