In Xcode 4.3.3, this is caused by re-running the app (command+R) or stopping it (command+.) while halted on a breakpoint. To fix the error once you've gotten it, it usually works to stop the app, (command+.), unplug the device, plug it back in, and run the app again.
To avoid the issue in the future, remember to continue (command+control+y or hit the play button near the debugger output) before stopping. If you have many breakpoints or are in a loop, you can deactivate one breakpoint by going to that line and hitting command + \ or you can deactivate all breakpoints by hitting command + y.
If you eventually get the error ending in "This generally means that another instance of this process was already running or is hung in the debugger," you need to reboot the device.
I submitted a bug report to Apple. I suggest you all do the same so that this gets the attention it deserves.
Edit: the "qLaunchSuccess packet" bug doesn't happen in Xcode 4.4 or 4.5 as it did in 4.3. However, 4.4 and 4.5 experience "Timed out waiting for app to launch" instead--possibly the same issue with a new message. See this question for some possible solutions. Nothing works for met yet. The behavior seems different than 4.3.3 because the error doesn't come up every time I stop while halted on a breakpoint. I will experiment and see if my workaround for 4.3 also fixes the 4.4/4.5 issue.