Maximum current that could be drawn out of iPhone 4 headphone Jack?
In your example of the Square Reader, it can be deceptive. I too wondered how there was power running to the headphone jack as Apple requires/uses the dock connector to charge, sync, etc. All the add-on devices use the dock and other than headphones I don't know of companies using the headphone jack. Why had no one used it before Square. Read on... 

The Square reader actually takes the magnetic information from the swiped card and turns it into audio tones. These tones are then interpreted by the Square App and allow it to process the swipe like a regular credit/debit card transaction.

In my opinion, a very elegant programming solution.