I finally figured out what happened, and am happy to post this to other Google Apps admins so that they aren’t left scratching their heads like I was. If your connection is failing right away after adding your Google Apps e-mail address as an Exchange account and trying to check your mail, then try the steps below:

Step 1: Login at your Google Apps for domains control panel located at http://www.google.com/a/yourdomain.com <—- Replace with your domain.

Step 2: Click the mobile link as shown below

You will then be presented with the screen below:

Make sure enable Google Sync is checked. This is something new, because before iOS 4 I was able to sync without any issues but after iOS 4 I visited the control panel and noticed this was disabled on all of my domains.

I hope this helps those of you still having problems! If not leave me a comment and let me see if I can find other issues!