I'm developing an HTTP api for our web application. Initially, the primary consumer of the API will be an iPhone app we're developing, but I'm designing this with future uses in mind (such as mobile apps for other platforms). I'm trying to decide on the best way to authenticate users so they can access their accounts from the iPhone. I've got a design that I think works well, but I'm no security expert, so I figured it would be good to ask for feedback here.

The design of the user authentication has 3 primary goals:

1. Good user experience: We want to allow users to enter their credentials once, and remain logged in indefinitely, until they explicitly log out. I would have considered OAuth if not for the fact that the experience from an iPhone app is pretty awful, from what I've heard (i.e. it launches the login form in Safari, then tells the user to return to the app when authentication succeeds).
2. No need to store the user creds with the app: I always hate the idea of having the user's password stored in either plain text or symmetrically encrypted anywhere, so I don't want the app to have to store the password to pass it to the API for future API requests.
3. Security: We definitely don't need the intense security of a banking app, but I'd obviously like this to be secure.

Overall, the API is REST-inspired (i.e. treating URLs as resources, and using the HTTP methods and status codes semantically). Each request to the API must include two custom HTTP headers: an API Key (unique to each client app) and a unique device ID. The API requires all requests to be made using HTTPS, so that the headers and body are encrypted.

My plan is to have an api_sessions table in my database. It has a unique constraint on the API key and unique device ID (so that a device may only be logged into a single user account through a given app) as well as a foreign key to the users table. The API will have a login endpoint, which receives the username/password and, if they match an account, logs the user in, creating an api_sessions record for the given API key and device id. Future API requests will look up the api_session using the API key and device id, and, if a record is found, treat the request as being logged in under the user account referenced by the api_session record. There will also be a logout API endpoint, which deletes the record from the api_sessions table.

Does anyone see any obvious security holes in this?